MAINTAINING AND REVIEWING
YOUR INSURANCE COVERS

If you already have some insurance, your policies should be reviewed periodically. Shop around yourself to get the best deal. Sometime this can be technically challenging as different companies’ policy wording appear similar but can have subtle word changes. You should also consider the financial strength of the insurer and their claims paying rating.

The policy wording is all-important in determining whether an insurance claim is paid. This is particularly true of ‘living’ insurances, e.g. disability income and trauma or critical illness where you need to meet the disability definition or actually be diagnosed with one of the critical illnesses before a payment is made. You should either obtain the actual policy wording to compare policies and ensure that the chosen policy meets your needs, or preferably get advice from an appropriately qualified insurance financial adviser to help you with policy wordings and subtle differences. Price is only one of the many considerations.

All licensed insurance companies must give you their financial strength rating before you apply for insurance or, if they don’t have a financial strength rating, the reason why (typically, if they are small insurers). The financial strength rating will also be on the insurer’s internet site. This will give you an idea of the present financial strength of the insurer. If the financial strength rating is downgraded, the insurer must tell existing policyholders.

You should consider what other benefits and insurances you have. Insurance provided through your employer is typically cheaper than individually arranged insurance and can generally be replaced by individual insurance when you leave your employer. (However, you should check as you may be left without insurance if, e.g., you have to leave your employer for health reasons.) If you have significant sick or other leave, a longer waiting period on a disability income policy will reduce the premium.

While you should always be considering the best deal on your insurance, there are some things you should be aware of if you consider changing insurer.

• The new policy wording may not be exactly the same which may lead to loss of options, new waiting periods or an unpleasant surprise when a claim is made.
• Your health may have changed meaning that existing conditions may not be covered by a new insurer and a new insurer may impose new terms before accepting the insurance. Your present insurer is bound by the terms of the present policy regardless of changes in your health.
• If for any reason you forget to disclose all health information requested to the new insurer, you run the risk of the new insurer declining a claim.
• If a financial adviser is recommending you change companies, ask what commission they will receive for the new policy and an assurance that the new insurance meets your needs at least as well in terms of price and features.
• There may be options under your present policy or your present insurer may be willing to change it to meet your changing needs.
• Finally, before you change from one company to another, it is extremely important to read the following brochure. If you are making this change with a Registered or Authorised Financial Adviser, the Policy Replacement Form is required to be completed with you. This is to protect your best interests.  
• Replacement Policy Brochure