With a wide range of life insurance policies that are available on the market, Aussies are able to find a policy that is suitable for them to protect their loved one's financial future. However, people that choose a set and forget approach when it comes to life insurance can soon find themselves forking out more than what they intended to.
Many Australians leave their policies to be renewed automatically
Call it loyalty or a set and forget approach that has been undertaken by many Australians, but many Aussies chose not to renew their life insurance policies. Recent research by Roy Morgan revealed that 77.4% of general insurance policies were renewed with the same company without approaching other companies.
According to the data, this is down by 2.7% when compared to five years ago. This may seem like nothing to worry about, but Aussies could be potential passing up the opportunity to save hundreds of dollars when it comes to renewing their policy with an insurer who will offer them a better rate.
More reviewing, less switching
Reviewing your life insurance policy on a constant basis is essential to finding an adequate cover that caters to your needs. In general, you need to review your life insurance whenever life's major events occur such as a change in your financial circumstances, getting married, getting a job, and having a baby to list a few.
This is to ensure that you and your dependents are taken care of financially in the event where you fall ill, sustain an injury, or pass on. It can also let you get access to the same benefits but at a lower rate that can help you save.
The research by Roy Morgan revealed that 1 in 5 Australians (9.8 million) review their general insurance policies over the past 12 months, which was an increase of 17.7% from 2013. However, there was less switching when it came to approaching another company with 15.1% of 19.8% of people who review their policy approaching other companies.
Looking around for a tailor-made fit
Australians are taking a more proactive role when it comes to shopping around for a policy that comes with the best possible rate, but they still get cold feet when it comes to switching. It is vital that you get an insurer that understands your needs and offers you a range of options that will be best suited to your needs.
Looking beyond the premium rate that is charged is also important. Keep in mind that just because a policy is expensive you will be getting the best deal. The same goes for cheap policies. Always check the features and exclusions that come with it.
This tends to be outlined in the product disclosure statement (PDS) that needs to be read carefully before signing your name on the dotted line. The take home is to always compare your way to a policy that will offer you the best value for your money.