What To Do With Your Insurance When The Budget Bites

Dec 14, 2014

Christmas is the time of year most of us look forward to, however along with all the festivities, often comes increased financial pressures.

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When things get tough financially we look to make cut backs on what we consider to be luxury or non-essential items. More often than not insurance premiums fall into this category.

However, we’ve seen many cases where people have cancelled their insurance to save a few dollars and then unfortunately, the unexpected happens, leaving people in a far worse financial situation than if they struggled a bit to maintain their insurance cover.

So before you make any ‘knee jerk’ reactions and cancel your insurance, look instead at whether you can make it more affordable. Unless you’ve won ‘big’ in the lotto, or you have no debts or dependents, then cancelling insurance cover is probably not the best option and is a huge financial risk.

The good news is that many insurance companies now offer a wider range of options to suit different budgets. They are usually also open to discussing payment plans if you have fallen into arrears as they fully understand the importance of maintaining cover.

Here are some common ways that you can achieve affordable insurance.

• Look at reducing the amount of cover that would be paid in the event of a claim, this means you still maintain some protection going forward.

• For critical illness policies, investigate possibilities of restructuring your cover to save money.

• Look at extending wait periods on income protection type policies or reducing the claim payment period. This can substantially reduce your costs and have a big impact on your pocket.

• If you have medical insurance, consider having a higher excess or look at removing “add ons” that you can do without.

At Foresight Financial Planning we believe it is all about making informed choices and not panic reactions. As we always say, planning with Foresight beats regretting through hindsight.

Before altering or cancelling your insurance you should always look at getting some sound advice as it is vital that you understand what you have and why. If you’re concerned about how much you’re paying in insurance premiums, please feel free to get in touch with us for a free, no-obligation chat over a cup of coffee.

Whatever you’re doing this festive season, we wish you all a Happy Christmas and fun New Year.