For many, the past 6-8 weeks have been life changing. Uncertainty feels like it’s reigning supreme and while you might have been hopeful that by now things may have turned around and you could be starting to get back to your everyday normal, for most this is not the case.

Many will now be starting to look closer at their budgets and beginning to determine ‘what else’ they can cut back on in order to survive and to enable them to continue to meet their 'basic necessity' costs of living. One of those areas, that may be being looked at, is personal insurance.

I get it. You think ‘why am I paying these premiums now when they are not a necessity?’ and you say to yourself ’I’ll just phone the company now and cancel it and get cover again once we’re through this mess’.

STOP - Before you do anything, pick up the phone and contact your Financial Adviser because you have options.

Many comprehensive personal insurance providers that Advisers deal with are in the process of, or just starting to release details in relation to how they are helping clients with cover during the COVID-19 pandemic period.

While options available vary across insurance providers and are subject to certain conditions being met, two options that have been released thus far, include:

The ability to reduce cover for a period of time, in turn reducing premiums, and the ability to have your original levels of cover reinstated once that period ends.
Cover and Premium suspensions for up to three (3) months at a time, subject to a total period of 12 months, with the ability to have original levels of cover reinstated, subject to terms and conditions.

And even if you don’t meet the requirements to be eligible for the above options, your Financial Adviser can still work with you in other ways to help you potentially reduce your out-of-pocket costs.

These include:

Reducing your existing levels of cover - It may have been some time since you reviewed your insurance position and if there have been changes to your circumstances (reduced levels of debt, children no longer being financially dependent, inheritance or windfalls being received), these can all have an impact on your personal insurance needs.
Reviewing the structure of your policies - There may be alternatives available to you that allow you to reduce your out-of-pocket expenses.
Alternative lower cost provider options - Insurers are always improving their policy contracts and where there are no major health issues or changes since your original policies was taken out, it may be possible that lower cost premiums may be able to be sourced for your needs.

Why you shouldn’t simply cancel and re-apply later.

Comprehensive personal insurance cover can be complex.

Your Age, weight, personal health and family history can all impact on your ability to obtain cover or not. In the same sense, it can also have an impact on the premiums you pay in relation to this cover. In addition, you will also be required to undertake the entire application process in full, including underwriting. This may result in the requirement for additional health checks and/or blood tests, etc.

Your age, especially if you have had a birthday or birthdays since cancelling your original policy/ies, can also increase premiums by more than what they may have increased, had you retained your original cover.

It may also be possible that features you hold under your current policies are now no longer available to new policies. This can be exceptionally important when it comes to Income Protection policies which were originally taken out under an ‘Agreed’ value contract, especially if there have been reductions to your income levels.

There is also every chance that once things return to ‘normal’ that daily life will get in the way and reapplying for that insurance you cancelled will not get done and when you need it, it will be too late.

And finally, the big one - some insurance, that you can continue to afford, is better than none. Of course this still needs to be weighed up, but if financially and emotionally an insurable event is going to cause significant stresses or increase that stress, having options and being comfortable with those options at least allows you to get to a position or a point in time where you should be emotionally able to deal with and work through your changed situation and circumstances.

Update - May 12, 2020

For anyone wondering what insurers have COVID-19 measures in place, below is a full list:

AIA
AIA/Comminsure
BT Life
Clearview Life
Integrity Life
MetLife
MLC Neos Life
OnePath
PPS Mutual
TAL
Zurich

Want to discuss your situation?

Should you wish to review your existing personal insurance cover or to discuss the options you have available to you in regards to reducing your potential premiums, please do not hesitate to contact me via phone at 0457 161 958 or via email at janine@thefarmprotectors.com.au.

The information posted to this page is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.

Janine McLean, Authorised Representative No. 1271148 and The Farm Protectors ABN 93 151 696 605 Corporate Authorised Representative No. 413825 are Authorised Representatives of Synchron, AFSL Licence No. 243313.

Personal Insurance - Know Your Options

Financial Security