What Is an Insurance Review?

An insurance review is a thorough look at your insurance coverage – the policies protecting your vehicles, home, family members and other valuables. To review your insurance coverages, enlist the help of an experienced agent to tap into their expertise and knowledge. An agent will be knowledgeable about the available insurance products and can provide professional guidance on which coverages may be best for your unique situation.

The Benefits of an Insurance Review

An insurance review helps provide you the peace of mind that your most treasured belongings (and family members) are adequately protected in case something unexpected happens like a fire, theft or weather event. A review could also result in a potential reduction in your insurance costs if, for example, your agent discovers you are eligible for discounts, or that you require less coverage than you did previously.

Why (and When) Should You Review Your Insurance Coverage?

It is critical to review your insurance coverage regularly to help ensure that your property, your possessions and your loved ones are well protected. During an insurance review, you should evaluate your home insurance (or renters insurance), car insurance and any other policies you have in your name.

When should you do a review? When your circumstances have changed, or you have what’s considered a “qualifying event” or a “life-changing event” in insurance terms, you may want to consider an insurance review. As mentioned earlier, these events include things like having a baby, getting married and other big milestones. You should also consider an insurance review any time your policies are up for renewal. This is typically once per year.

What’s an Insurance-Qualifying Event?

Insurance-qualifying events are those moments when life circumstances change. Since these events can occur throughout the period of an insurance policy, you’ll want to check with your agent when an insurance-qualifying event occurs outside of the typical policy renewal time frame.

A qualifying or life-changing event, for insurance purposes, typically means:

• A change in family status or size:This includes having a baby, adopting a child, getting married, getting divorced or losing a family member.
• Childhood milestones:When your child graduates from school, goes off to attend college or turns 16 and is eligible to drive a car, it’s a good time to check in with your insurance agent to review your coverage.
• Retirement and aging milestones:If you retire and no longer commute to work, or downsize from owning a home to renting one, an insurance review can help identify potential adjustments in your coverage.
• Professional changes:If you own a business, changes to your company can warrant an insurance review, too. These changes could include selling your business, going public with an Initial Public Offering (IPO) or changing office locations.
• Changes in your living situation:Changes in your living situation (or locale) merit an insurance review. This might include moving, selling a property, remodeling your home or renting it out through a short-term rental property platform.

Significant events are a part of life. When your insurance coverage is aligned with your life events, you can focus more on those moments that matter.

Other Times You May Want an Insurance Review

In addition to those life events that might prompt an insurance review, there are other times that you may want to check with your insurance agent to review your coverage. For example, if you have expensive, high-value possessions on your property or are taking steps to increase the safety of your home, such as by adding an alarm system or upgrading your electrical system, those situations may warrant a fresh look at your insurance coverage. If natural disasters (for example, hurricanes) have increased in your area, you also may want to consider updating your policy to reflect these added risks. Check with your insurance agent for guidance.

How Often Should You Change Your Coverage?

Though you might review your policies annually, that doesn’t mean you’ll always need to make a change that often. In many cases, your current coverage may still be adequate. But generally, it’s a good idea to review all of your insurance needs at least once a year. If you have a major life change, contact your insurance agent or company representative, as the change in your life may have an impact on your insurance needs.¹

How Current Is Your Household’s Insurance Coverage?

If you haven’t conducted an insurance review recently (or you’ve experienced a major life event or acquired additional property of significant value since you last renewed your policy), it might be time to evaluate your coverage.

Learn more about Travelers’ homeowners insurance products, or if you’re ready to take the next step, get a quote or contact your local independent agent.

What to look for during your insurance review:

*An example of how a Life Insurance policy would look like

To start your insurance review, simply take out the contract you have signed with the insurance company and go through the terms and conditions of the policy. Key points to take note when going through your insurance policy:

*Below we will be using some basic terms for the insurance policy, if you are not familiar with insurance product in general, here is a good guide to start off with.

1. Term Duration

It is important to know how long your insurance policy covers you for so that it won’t catch you off guard when it expires. This is especially important in Life Insurance because if you have a term Life Insurance, it WILL expire sometime in the future. It is important to have a plan after it has expired or plan for a renewal if you wish to continue to be insured after that.

1. Insurance Cover

Know the amount of insurance cover you will be receiving in the event of an insurance claim. Then, ask yourself “is this the amount I would want to be having if I make an insurance claim right now?” Some major life incident might have occurred and the insurance cover you required might be different from what you used to require back then.

For example, if you have a family, you may consider that you want to increase your Life Insurance cover to insure their well-being in case anything happens to you. You might need to buy extra Life Insurance when you just bought a new house to secure your mortgage loan repayment.

The insurance policy should be tailored to suit your needs, but your needs change as life progresses, therefore it is always important to let your insurance policy ‘progress’ together with your life!

• Insurance Rider

When you purchase an insurance policy, you are most likely purchasing some insurance riders that comes along with it. Be familiar with the insurance riders in your existing insurance policy, so that you can utilize your insurance policy to its fullest.

For example, Life Insurance policy could come with critical illness riders which allows you to make an early withdrawal of your insurance coverage.

1. Insurance Premium

Do you think it’s really necessary to pay more for your packaged Life Insurance policies that usually termed as investment-linked? Or it’s wiser to invest your money somewhere else? Now, it is time to take a look at how much you are paying monthly for your existing insurance policy. After that, go shop around for different insurance company to see what deals they are offering compared to what you are paying. Most of the time, we will only complain that our insurance premium is too high.

Image source: tenor

For that, you can look for a newer insurance policy that might not exist during your purchase back then. Such insurance company uses e-policy, thus cut down in the cost of insurance agent resulting in a lower premium overall.

Things to look out for when changing policy

Now if you have found out better deals in the market or you are unhappy with your current policy and looking to terminate it, please hold on for one moment!

There are 5 important things to note:

1. Cash Value

First thing is the cash value of your investment linked Life Insurance policy. Some policies allow you to build up cash value and use it as surrender value at the end of your policy, so you should definitely take that into account. Coming back to this investment linked option, you should consider that you might be able to get a higher return if you invest your money elsewhere and opt for basic protection with a much lower payment. 

1. Early Termination Charge

When you terminate your insurance policy early, most likely your insurance provider will not be happy. Therefore, read your terms & conditions carefully and be prepared for early termination charge (they might be costly). To avoid repeating this mistake again, you should consider getting insurance with the renewable term without losing any cash value, as you would normally lose your cash value upon termination with your investment linked Life Insurance policy.

• Higher Premium

Many policies charge higher prices when you are older age, had just recovered from sickness or just had an occupational change. Therefore, if you are thinking to switch over to another policy to have a higher cover up to RM500,000, you should take that into account and check out those that offer a more affordable rate. Generally, if you are unhappy with your current policy, it is better to do it immediately rather than waiting around because it might get more costly as time goes by.

1. Simplicity

A complicated policy does not equate to a good policy. It is always better to buy something that you can understand rather than something that is overly complicated and you have no idea how it works because if you do not even understand how the product works, how could you possibly get the most out of it?

For Life Insurance, there are companies which will offer you a clear table of a monthly payment, insurance cover and easy to understand rider which we feel would be the perfect Life Insurance choice. Purchasing your Life Insurance online also gives you access to make changes to your policy and truly be in control in getting what you really need and what’s best for you.

1. Safekeeping Your Policy

It is also important to safe keep your insurance policy document to ensure that it can be accessed by your family if there’s anything happened to you. So it’s important to take this into accounts and look for companies that provide digital e-policy, which is retrievable via email or online storage.

Now that you have understood what you should check for in your next insurance review, it is time to put the knowledge into use. Go through your policy slowly and change anything that you are unhappy with. If you still do not have a Life Insurance policy, you should consider getting one as it can heavily burden your loved ones if there’s anything unpredictable happened to you.