In the last two weeks or so, we have seen a number of new clients who have existing insurance cover that is not appropriate for their needs. They are either over-insured, under-insured, have the wrong benefits or their cover is structured incorrectly.
We have seen one client who is paying for a benefit that will never pay-out; another client whose old adviser recommended he move his cover to a new insurance company even though he would have exclusions applied (which he did not have before) and the premiums ended up being higher than what he was paying; yet another client was told she couldn't get medical insurance due to two pre-existing medical conditions, however we were able to present offers for cover from two different insurers with only minor exclusions … and the list goes on and on.
I know that to most people insurance is not very interesting and is just something you do because you have to, but I cannot stress enough how important it is to know what cover you have in place, and to fully understand how it works at claim time. You need to make sure that your adviser is actually giving you advice and that they can justify why they are recommending the benefits and levels of cover that they are.
Probably the most important thing to remember is that if your adviser is recommending that you change insurance providers, make sure that they actually have a reason to do this and be careful that you will not incur any exclusions that you did not have on your old policy. A saving of $40 per month might be great but if you are going to have an exclusion for a pre-existing condition, is it worth it?… only you can decide.