AMTD PolicyPal An annual insurance review is a crucial step in adapting to life’s changes while ensuring comprehensive protection. Here’s how to do it right.
In an increasingly uncertain world, insurance serves as a vital shield to safeguard you and your assets from unforeseen risks. Whether it’s protecting your health, securing your family’s financial future, or ensuring the safety of your car and home, insurance plays a pivotal role in providing peace of mind.
However, acquiring insurance isn’t enough; it needs periodic evaluation. Hence the need for annual insurance reviews. This proactive and prudent approach ensures your coverage aligns with the dynamic aspects of your life.
Here are five compelling reasons why reviewing your insurance annually is good practice for maintaining comprehensive protection while adapting to the ever-changing landscapes of finance, lifestyle, and risk.
Related Story: Best Year-End Travel Destinations to Beat the Crowd
#1 An insurance review realigns your insurance coverage as your financial needs change
Your life is an ever-evolving journey. From the early years of establishing your career to the later phases of retirement planning, you will encounter various changes in your financial standing. Factors like career advances, investment decisions, and economic fluctuations contribute to the fluid nature of your personal finances.
These intricacies are closely intertwined with the effectiveness of your insurance coverage. As your financial circumstances shift, so do your requirements for insurance protection. The table below shows how such changes can affect an insured person.
|
Cause |
Effect |
Scenario |
|
Salary Increase |
The income boost can lead to a growth in lifestyle and spending habits. It is essential to reassess coverage limits to ensure they align with the expanded financial scope. |
Emma gets a pay rise after her promotion. She revisits her life insurance policy to ensure her family’s financial protection matches her new income level. |
|
Investment Gain |
Positive investment outcomes contribute to overall wealth, thus increasing the value of assets requiring protection. Reevaluating insurance coverage ensures that newfound prosperity is safeguarded too. |
Poh Ling’s investment property has gained significant value in the past 10 years. As her asset value grows, she reviews her (1) home insurance policy to adjust coverage limits and (2) life insurance policy to gain adequate wealth protection. |
|
Debt Reduction |
Reducing debt not only improves overall financial health. It can also impact insurance needs. An insurance review is needed with reduced financial liabilities, too. |
James clears his student loan, dropping his overall debt. He revisits his personal accident coverage, realigning to follow his improved financial standing. |
#2 Look into your lifestyle changes and their effect on your insurance coverage
Life events bring emotional and logistical adjustments that impact your insurance needs. In order to ensure that the protection remains relevant and effective, it’s crucial to understand the correlation between lifestyle changes and insurance coverage.
The table below highlights three unique dynamics related to marriage, childbirth, and retirement.
|
Cause |
Effect |
Scenario |
|
Marriage |
Marriage usually involves combining assets, shared responsibilities and possibly increased financial interdependence. Reviewing insurance policies is vital to protect newly-weds adequately. |
Newlyweds Lynn and David decide to evaluate their home and car insurance policies to ensure they maximise discounts, get the best premiums, and have sufficient coverage. This streamlines their insurance management and can lead to cost savings. |
|
Childbirth |
A child’s arrival reshapes priorities and responsibilities. From health insurance to life insurance and education planning for both the parents and child, addressing the evolving insurance needs of a growing family is necessary for comprehensive coverage. |
Ashwin and Nellie, new parents, see the need to enhance their life insurance coverage to secure their child’s financial future. They explore policies that provide education funding and increase financial protection for their family. |
|
Retirement |
Retirement signifies the culmination of a professional journey and prompts a reassessment of insurance requirements. As financial obligations change, the protective measures to safeguard one’s retirement years should, too. |
Rama takes the opportunity to review his health insurance options, as his needs differ from when he was working. He explores supplemental coverage to secure comprehensive health protection in his golden years. |
Related Story: Best Home Insurance in Singapore 2023
#3 Understand how your insurance policies are updated over time
Just like the lives they protect, insurance policies are subject to change. The terms, conditions, and coverage details embedded in these contracts are not static. They adapt to the shifting landscapes of risk, industry standards, and regulatory requirements.
It is imperative to understand how and why insurance policies are updated to ensure you, the insured, maintain a robust shield against unforeseen circumstances.
Review your insurance policy terms and conditions annually
An annual review of your insurance policy is a strategic move rather than just another routine task. The fine print of an insurance policy holds critical information that affects the insured person’s coverage adequacy and financial well-being. Here are two factors that you need to focus on: coverage adequacy and policy exclusions.
|
Factor |
Effect |
Solution |
|
Coverage Adequacy |
Lifestyle changes, financial growth, and emerging risks may render the existing coverage insufficient. |
An annual review ensures your policy aligns with your current needs, giving you adequate protection against risks. |
|
Policy Exclusions |
Insurance policies may be refined to address emerging risks or to comply with industry regulations. |
Regular reviews may help policyholders stay informed about new exclusions, ensuring they know about the scope and limitations of their insurance coverage. |
Policy updates can impact insurance coverage and premiums
Policy updates, whether initiated by the insurance provider or prompted by changes in the policyholder’s personal circumstances, can affect coverage and premiums. Understanding the dynamics of these updates can aid informed decision-making. These involve two key factors: expanded coverage and premium adjustments.
This table shows you how these two factors affect your insurance coverage and what you can do.
|
Factor |
Effect |
Solution |
|
Expanded Coverage |
Updates may introduce new coverage options, addressing emerging risks or enhancing protection for specific areas. |
Policyholders can evaluate these changes to ensure their coverage aligns with the evolving nature of their lives. |
|
Premium Adjustments |
Changes in coverage, discounts, or even external factors, such as market conditions, can influence premium costs. |
An annual review helps in identifying cost-saving opportunities or adjusting coverage to maintain a balance between protection and affordability. |
#4 Analyse your health insurance coverage
Health insurance is a cornerstone for comprehensive coverage. It covers various aspects like medical costs, daily hospitalisation allowances, and specialist fees. In Singapore, the most common medical insurance consists of MediShield Life and Integrated Shield Plans. The table below showcases the key features of both insurance plans.
|
MediShield Life |
Integrated Shield Plan |
|
|
How to ensure your health insurance coverage is sufficient
The table below introduces three factors that can affect your health insurance coverage and what you need to be aware of.
|
Factor |
What To Do |
|
Evolving Health Needs |
Factors like your age, lifestyle, or health condition change over time. Reviewing your insurance plan helps align your coverage with current health needs and future requirements too. |
|
Change in Healthcare Providers |
The network of healthcare providers can change over time. By doing an annual insurance review, you’ll be able to see if your preferred doctors, hospitals, and specialists remain within your insurance plan. |
|
Policy Adjustments |
Health insurance coverages may have updates that introduce new terms or adjust existing ones. With a regular review in place, you’ll be able to better understand and adapt to these adjustments or new terms and ensure you have optimal coverage. |
Related Story: Best Health Insurance in Singapore 2023
#5 Discover why a life insurance review counts, too
An annual evaluation of your life insurance plan is vital for three reasons. It is key in family protection, ensuring that life insurance coverage adequately shields loved ones with financial stability and the resources to navigate life’s uncertainties.
Additionally, with the right life insurance coverage, you can align them to specific financial goals related to funding education, home ownership and leaving a lasting legacy for your future generations. Finally, life insurance is useful in comprehensive risk management. Regular insurance coverage reviews empower you to reassess and mitigate financial risks.
This proactive approach fosters a secure and forward-looking financial future. The table below illustrates the factors requiring life insurance assessments and the benefits of assessing them.
|
Factor |
Effect |
|
Financial Protection |
Life insurance provides a lump sum payment to beneficiaries in the event of the policyholder’s death, offering stability during challenging times |
|
Income Replacement |
The insurance plan can replace lost income, supporting dependants and maintaining their living standards if the primary breadwinner is absent |
|
Investment Opportunities |
Some life insurance plans offer an investment component, allowing policyholders to accumulate cash value over time |
In summary, an annual insurance review is your proactive key to financial resilience. Be it optimising health coverage or fine-tuning life insurance for family protection, this yearly commitment empowers you to stay ahead of life’s changes.
As the year unfolds, be sure to reassess and fortify your financial defenses, to build a more resilient future.
Enquire more and contact us today!
Want to know more about AMTD PolicyPal Group insurance plans?
Cannot find what you are looking for? Please reach out to us at Contact AMTD PolicyPal
Disclaimer: Protected up to specified limits by SDIC. This is only product information provided. You may wish to seek advice from a qualified adviser before buying the product. If you choose not to seek advice from a qualified adviser, you should consider whether the product is suitable for you. Buying an insurance product that is not suitable for you may impact your ability to finance your future financial needs. If you decide that the policy is not suitable after purchasing the policy, you may terminate the policy in accordance with the free-look provision, if any, and the insurer may recover from you any expense incurred by the insurer in underwriting the policy.
Read More:
Welcome to Adulthood: Insurance Edition
The Best Maid Insurance in Singapore for Your Domestic Helper
How to Buy a Car When COEs Are High
Your Guide to The Best Home Insurance in Singapore (2023)
