Why now is the time to review your life insurance?
The Australian life insurance market has undergone some significant pricing changes in recent years, and many policyholders may not realise how this is affecting what they pay.
Insurers have been adjusting their pricing models, particularly around premium structures and long-term sustainability. At the same time, competition for new business has increased. As a result, new policies are often being offered with discounted premiums, while existing policyholders continue paying higher rates for similar levels of cover.
It is not uncommon for someone who has held their cover for five years or more to be paying up to 40% more than someone taking out a new policy today.
This difference is not necessarily due to changes in risk. It is largely driven by how insurers are pricing new business compared to their existing client base.
What this means for you?
If you have not reviewed your personal insurance cover in some time, there is a real possibility you may be paying more than you need to.
That does not automatically mean replacing your policy is the right course of action. Your current health, the quality of your cover, and the policy definitions you hold are all important considerations. However, understanding how your existing arrangements compare to what is available in today’s market is an important step in making an informed decision.
Ask yourself the following questions:
- Has it been 3 years or more since I reviewed my life insurance cover?
- Does my existing insurance cover align with my current personal financial circumstances?
- Do I have enough cover to manage my debts should death or disablement occur to me, or a family member?
- Do I have enough cover to maintain my family’s lifestyle should death or disablement occur to me, or a family member?
- Do you know if your insurance premiums are competitive and value for money in the current marketplace?
A timely reminder as we approach tax time
With the end of financial year approaching, it is also an opportune time to review your broader protection strategy, particularly income protection.
Consider the following:
- If you were unable to work due to illness or injury, how long could you maintain your current lifestyle?
- Do you have income protection in place?
- If so, is it still aligned with your current needs and circumstances?
- Did you know that income protection cover is a tax-deductible expense?
For many people, their ability to earn an income is their most valuable asset. Ensuring that income is appropriately protected is a key part of a well-structured financial plan.
How Alman Partners True Wealth can help
As part of its commitment to delivering a comprehensive advice experience, Alman Partners True Wealth provides clients with access to specialist life insurance and income protection expertise through Personal Risk Professionals.
If it has been a while since your cover was last reviewed, or if you would simply like to understand how your current arrangements compare to the broader market, we encourage you to speak with your Financial Adviser. They can facilitate a review with Personal Risk Professionals to ensure your cover remains appropriate, competitive, and aligned with your overall financial strategy.
Disclaimer
This article was authored by Personal Risk Professionals Pty Ltd. Personal Risk Professionals Pty Ltd is a Corporate Authorised Representative of MBS Advice Licence Pty Ltd AFSL No. 536983. The information in this article is general advice only and does not take into account your personal objectives, financial situation, or needs. Before acting on any information provided, you should consider whether it is appropriate to your circumstances and, where applicable, seek personal financial advice tailored to your situation. You should also ensure you read the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) prior to making any decision about a financial product.
Any information provided to you was purely factual in nature. It has not been taken into account your personal objectives, situation or needs. The information is objectively ascertainable and is not intended to imply any recommendation or opinion about a financial product. This does not constitute financial product advice under the Corporations Act 2001 (Cth). It is recommended that you obtain financial product advice before making any decision on a financial product such as a decision to purchase or invest in a financial product. Please contact us if you would like to obtain financial product advice.