Could you be over-insured?

Published on December 1st, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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It is time for a review

You could’ve bought one or more insurance policies a few years back to protect you in future, which is great. It is not so great when you find out that the policy you have been funding for the past years does not cater towards your current, or future needs. Try going over all your insurance to see which ones are still relevant to you. This will help you avoid killing your budget by over insuring yourself with policies that are not relevant.

Your pockets are bleeding

Life Insurance is an important investment people make in their lives, but if you are over insured it can make you lose out financially. The rule of thumb is to never take out a policy that takes up most of your salary. It always goes back to our first point of reviewing and seeing what you can afford. Speaking to a financial advisor can save you on both time and money. There is always time later to update, and upgrade.

Use the tools and resources available to you

There are accredited financial advisors who can help you figure out what will work for you. Furthermore, making use of Life Insurance Calculators on insurance sites that can help pin point whether you will have enough to cover you. This will assist in tailor making a policy that works with your salary and assets in mind, making it affordable and tailor made for you. The other route is financial planning, which acquires discipline and good bookkeeping skills. If you succeed in putting aside money in a savings accounts with good interest rates, you will soon realise that you have enough to help you retire comfortably.

Check your superannuation fund

This usually affects younger Australians. When you have multiple superfunds, this can result in havinglife insurance policies for each of which you don’t need. This will also result in your balance becoming eroded. Being part of a superannuation fund has the benefits of giving you competitive deals in terms of life insurance. It also gives you competitive rates because you are covered as a group.

As much as superannuation funds could come in handy in future, the current costs for younger workers is usually too much. Especially when compared to what they are paying for. Most pay for insurance that might not cater towards their needs, since the focus is on a group rather than an individual. Having too many spoons in superfunds that automatically sign you up for life insurance policies can be a disadvantage in the sense that you can only claim for one. You could consolidate your multiple superannuation funds. Check with your company’s superannuation fund is catered towards what you need, if not perhaps it’s time to review other ways to keep you covered.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.

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