6 things to consider when switching policies

Last updated on November 25th, 2021 at 03:00 pm by Bill Tsouvalas

There are many reasons as to why you may be considering a switch from your current life insurance policy to another. This could be due to the high premiums, being able to afford more coverage, or lack of feature and benefit that will not adequately cover you. Here are six things that you need to consider before switching your policy.

1. Finding a policy that is suitable for your age and health

Before moving from your current policy to the next you may want to consider if your new policy is suitable for your age and health. Checking the policy features to see if it is suitable for your current circumstances is essential, but it also helps to think of how your policy will help serve you long term. Always remember to compare the various policies that are available on the market to find one that will offer you the best value for your money.

2. Does it come with a premium that is suitable for you?

It is vital that you constantly assess whether your life insurance policy comes with premiums that match the features. According to research by Roy Morgan, 1,008,000 risk and life insurance policies were planning on switching companies, but only 77.4% of Aussies are leaving their policies to be renewed automatically without approaching a new company. This could lead to you missing out on a great deal in terms of finding a low rate policy.

3. Is a life insurance policy within super enough?

You may be considering whether taking out a life insurance policy is worth it, or you may have one already but wondering if switching up is worth it. This is where you need to carefully weigh the pros and cons of having a life insurance policy through a superannuation fund. Although superannuation funds offer an affordable life insurance policy, it also has the pitfalls of being catered towards a group rather than your individual needs.

4. Fees that come with the new policy

It pays to research the fees and charges that come with your new policy. The last thing that you want is to bite off more than you can chew, which can lead to you making your policy void. Not all policies will come with the same fees and charges. Therefore, reading the fine print of your product disclosure statement can highlight what ongoing fees come with the policy.

5. Will you be getting the same level of cover?

Checking to see if you will be getting the same level of cover or more is essential. You can also check the exclusions that come with the policy to ensure that you are not underinsured or won’t be covered for certain circumstances. The same applies to finding a policy that will be able to cover any pre-existing conditions that you may have.

6. Will it come with a waiting period?

Some policies come with a waiting period which can affect how the claim is paid out. Checking whether your policy has a waiting period will ensure that you adequately prepare your finances to cover the waiting period.