Does your life insurance still fit?
Your life insurance cover is an important part of your financial wellbeing, helping to provide protection for you and your loved ones if the unexpected happens.
As your protection needs can change over time, we recommend you review your life insurance regularly. These reviews are best done with your financial adviser, but you can do a self-assessment first.
Start by logging into My Zurich to view your latest policy schedule, which shows what cover you currently have. Then have a think about whether any of the following changes apply to you.
Changes that can impact your cover
1) Your family situation
If you’ve added a new member of the family, or become a carer for an elderly relative, you may find you need a higher level of cover to reflect your extra responsibilities.
On the flipside, if your dependants are now grown up or you have less family responsibilities, you may be able to reduce your level of cover.
If your marital status has changed, don’t forget to review your beneficiary nominations (for life insurance and superannuation) to make sure they still reflect the right outcomes for your family.
2) Your income
If you’ve received a promotion, or increased or reduced your working hours, your income may have changed significantly.
If you have an income protection policy, you need to make sure your level of cover accurately reflects your current income.
- If your income has increased but your level of cover hasn’t been updated, increasing your level of cover can help ensure you’ll receive a sufficient benefit to cover your living expenses if you can’t work.
- If your income has reduced but your level of cover hasn’t been updated, you may find you’re paying for a higher level of cover than you’d be able to make a claim on.
Your policy schedule shows what your current monthly benefit is, and what percentage of your before-tax income that’s based on. If you’re no longer earning that level of income, you may want to update your policy.
3) Your debts
Have you upsized your home since you last reviewed your life insurance? Or taken a big chunk out of your debts through a downsize, bonus or inheritance?
Covering your debts is one of the key purposes of life insurance. So if your debt situation has changed significantly in either direction, you should consider what that means for your level of cover.
Generally speaking, as you pay down your mortgage, your dependants get older and/or your superannuation balance rises, you may be able to reduce your level of cover. However, bear in mind that if you want to increase your cover again later, the additional cover may be more expensive than your existing cover.
4) Your health
Personal risk factors, such as smoking and your Body Mass Index (BMI), add what are called ‘premium loadings’ to your cover – which means you pay a higher premium than someone who doesn’t have this risk factor.
If your health has improved (e.g. you've lowered your BMI or your lifestyle has changed recently), get in touch with your financial adviser to review your policy and determine if these loadings can be removed to help lower your premium.
If your health has declined, we won’t reduce what you’re covered for or add any new premium loadings or exclusions. That’s one of the benefits of having fully-underwritten life insurance – once you’re covered, benefits can only move in your favour.
What if I just need to lower my premiums?
If you’re concerned about your premium, please talk to your financial adviser. They can work with you to see if it makes sense for you to:
- remove some extra-cost options you may have selected
- lower your cover amount
- switch off inflation protection (which indexes your cover amount) at each policy anniversary
- extend your waiting period on your income protection policy (i.e. the time you must be disabled before benefit payments start)
- reduce your benefit period on your income protection policy (i.e. the total amount of time you may be eligible to claim income protection benefits)
- explore the opportunity for tax deductions for your premiums. If you’re eligible, this can help to reduce the impact of premium increases.
Additionally, you can contact us
If you have questions about your policy, we can help you understand your cover and the options available under your policy. Learn more about life insurance affordability.
