Am I Paying Too Much For My Insurance?

Am I paying too much for my insurance?

Firstly, you need to ensure that the cover you have is best suited to your needs, now and in the future.

Do you fully understand what you have?

Bill McGavock of Catalyst Financial says that the vast majority of clients he reviews have little or no idea how the cover types they have work … or even why they have the amounts they are insured for.

Often they were recommended a strategy by an Adviser or bank employee who didn’t have the interest or ability to be able to recommend appropriate protection.

Many people are paying too much for what they have, or the cover is simply not suitable. They won’t get paid what they expect and need if they claim.

It’s also important to many people to be able to reduce their cover as their assets grow, and debt gets paid down. There are right and wrong ways to structure this.

What’s the solution? The first course of action is to review the cover that you have.

This needs to be done by an independent Financial Adviser who specialises in Personal Risk Insurance.

What does independent mean? In this case that they have agencies with all the major insurers in this country.

There are six of them AIA, Asteron, Chubb Life (formerly Cigna), Fidelity Life, nib (for medical only) and Partners Life.

You may have insurance that you took out via a bank, and now has one of these company’s logos on it.

Be very careful.

While these insurers have taken over the insurance clients of all the major banks in NZ the policy wordings for the policies are the same inferior product that the bank sold you.

This is backed up by independent rating agencies like Quality Product Research and Strategy Life Risk Insurance Analysis.

A Lada with a Mercedes badge is still a Lada.

Also, is the Adviser part of a solid company?

If they aren’t available is there back up?

There are many individual Advisers out there who may be great, but do they have the support?

Another factor with small Financial Advice Providers is economies of scale.

Can they service their client base?

Or are they focused on getting the next client?

The real test with this is … Could you explain to someone else why you have the cover in place that you do and how it will function if you need it?

If not, contact an Adviser and get some quality advice.