If you own a home, you’ve probably noticed something in recent months.
Your mortgage repayments, which might have got quite low for a while, have started to increase again.
While interest rates are still expected to settle below historical averages, the adjustment in repayments has been a tricky one for some households, who’ve had to put aside a bit of extra cash each month.
If you have insurance cover in place, it’s a great time to check that you still have the right sort of protection for your needs.
Income protection
If you have an agreed value income protection policy in place, or a mortgage and rent-style policy, it could be time to check that the amount you are covered for is still appropriate.
Has your income gone up? It might be time to increase the amount your income protection would pay you in the event of a claim.
If you have a mortgage repayment policy, do you still have enough cover to take care of your repayments? Most mortgage repayment policies are tied to an amount such as 110 per cent of your repayments, but if your repayments have increased a lot, you may need to reassess your level of cover. It’s a good idea to review the level of cover of your insurance policies each year anyway, and now might be a great time to book that in.
Life insurance
If your monthly expenses have gone up, it could be a good idea to assess whether your life insurance cover is still appropriate. Have you structured it in a way that will leave your loved ones enough to carry on, if you were no longer around to help financially?
Health insurance
Even your health insurance could be affected by a change in your mortgage repayments. If your home loan is now taking more of your disposable income, it could be a good idea to reassess how much you can realistically continue to “self-insure”.
Some people opt to increase their health insurance excess to reduce the premiums (and the ongoing cost of their cover), if they can afford to foot more of the bill should there be a need to pay for health procedures. But if you have less spare cash than normal at the moment, you might like the peace of mind of knowing that your health cover is primed and ready to step in, if needed. It depends on your circumstances.
Are you experiencing budgeting stress?
You may be wondering which of your expenses you can cut. And you’ll thank yourself later if insurance isn’t one of them.
When you cancel an insurance policy, you may lose the ability to be covered in future for any health conditions you’ve developed since you took it out. If things are a little crunchy at the moment, there are other things you can do, including extending your wait period on your income protection policies or temporarily reducing the amount of cover you have in place. We can help you work through the options so that you retain maximum protection with the resources you have available.
Like to talk?
We can help you work out how to get the maximum protection possible from your insurance cover. Give us a call today to discuss your options and what peace of mind might feel like.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.