Tips for buying insurance

Consider these tips when you are buying insurance.

It’s a good idea to:

1. Have an emergency fund 
   If you have some money of your own available for emergencies you can take some of the insurance risk yourself. This will allow you to reduce the cost of your insurance by choosing higher policy excesses, longer waiting periods (for income protection), and lower levels of life and trauma cover.
2. Choose the right excess
   If you have a high excess, the premium will be lower, because the insurer is covering less of the cost. But you will also have to pay more for each claim. Choose a policy excess that matches the point at which you would struggle to make the payment.
3. Combine your insurance
   Buying as much of your insurance as possible from one company can save you money.
4. Seriously consider any insurance offered through your employer or attached to another savings or insurance product
   These are often offered at much reduced rates. But before joining any of these schemes check whether the policy is transferable, and on what terms, if you subsequently leave your employer.
5. Tell the insurer everything
   By law you must give all the information requested by the insurer. If you leave any important information out you could risk a claim being turned down.
6. Read the policy carefully
   Understand what is, and isn’t, covered by your policy. Take the time to check it and ask your insurer to explain anything that isn’t clear.
7. Review your insurances regularly
   It’s a good idea to review all of your insurances regularly. Schedule an annual review date in your diary or calendar.
   Don’t forget insurances paid by automatic payment – they’re easy to miss out when you do a review.
8. Pay your premiums on time
   If you stop paying, your insurance cover stops. The fact that you may have been paying premiums for the last 10 years will make no difference.
9. Know what insurance you already have
   Think about what insurance you already have – for example with your employer or as part of a loan agreement. Don’t double-up.
10. Don’t leave it too late
    Life insurance and income replacement premiums increase as you get older. Also medical problems do occur as we age and may also increase the premium.
11. Shop around
    Get a range of quotes and compare, looking closely at what is and isn’t included by each policy. Even where insurance is part of a loan agreement, it is still good practice to get comparable quotes before signing up. You don’t have to buy your insurance from the same organisation that is providing the loan.
12. Get help from a skilled insurer, broker or adviser
    Find a skilled adviser who is more interested in understanding your needs and ensuring your security, rather than solely on making the sale. There are also many helpful insurance-related websites available.