The Importance of an Annual Insurance Exam
Everyone knows the importance of monitoring our health, which is why every year millions of Americans make the trip to their local doctor for an annual exam. However, what have you done to ensure your financial wellness this year? Like an annual physical exam, it is equally important that we monitor our financial health. But what’s the best way to do this? It starts with reviewing your insurance policies.
Every year, thousands of insurance policies get modified. Policy rates increase and decrease as carriers modify, drop, or add coverage options. Staying aware of these changes can help ensure that both you and your family receive the coverage they need. In addition to staying on top of your coverage changes, reviewing your policy on an annual basis can help make sure that you get the best deal. In other words, being aware of your options can improve your chances of purchasing a policy to fit your needs without breaking the bank.
Reviewing your insurance policy on an annual basis has the potential to save you money while also protecting you from the risk of financial calamity.
The Importance of an Annual Insurance Exam
Everyone knows the importance of monitoring our health, which is why every year millions of Americans make the trip to their local doctor for an annual exam. However, what have you done to ensure your financial wellness this year? Like an annual physical exam, it is equally important that we monitor our financial health. But what’s the best way to do this? It starts with reviewing your insurance policies.
Every year, thousands of insurance policies get modified. Policy rates increase and decrease as carriers modify, drop, or add coverage options. Staying aware of these changes can help ensure that both you and your family receive the coverage they need. In addition to staying on top of your coverage changes, reviewing your policy on an annual basis can help make sure that you get the best deal. In other words, being aware of your options can improve your chances of purchasing a policy to fit your needs without breaking the bank.
Golden Rules of an Insurance Policy Review
While there are many different kinds of insurance policies available today, there are some golden rules you may want to consider when completing any kind of annual insurance policy review. To review your policies without sifting through mountains of pages, it’s recommended organizing your insurance policies by creating a one-page policy summary for each policy you own.2 Some people find this helpful because it summarizes the most important parts of your policy, however as long as you have the following information available to you while beginning your insurance policy review, you should be alright:2
- Type of policy (e.g. term life, whole life, health, disability)
- Insurance carrier
- Policy number
- Date issued and expiration
- Premium information (include the frequency of payment and amount)
- Life changing events (e.g. marriage, new employer, move, having a child, etc.)
By having access to this information you can answer bigger, broader questions such as: Do I need my current insurance policy? Do I need to modify my coverage? Is my premium too high? Do I need to explore other insurance policy options? Having the answers to these questions will be the first step in your insurance policy examination, but how do you pin-down the specifics of your policy?
Reviewing a Life Insurance Policy
In addition to the golden rules, there are some additional things to consider when beginning a life insurance policy examination. One of the most important things to consider when you begin a life insurance policy audit is your beneficiary, the person who you are entrusting your benefits to, which is why it’s vital that you review your life insurance policy to ensure that it still fits your needs.1 To do this, you will need access to specific information, Forbes gives the example of noting any health changes that may affect your policy and payout, ensuring the validity of your listed beneficiaries, and cross-checking the policy’s goal to make sure it meets your own.1 Having the above-mentioned information can help you make sure you make the best decision regarding your life insurance policy as you move forward this year – whether you decide to keep your policy, change carriers, add coverage, or anything in-between.
Reviewing a Health Insurance Policy
As mentioned, each insurance policy has its own unique footprint – meaning that when auditing your insurance policy, there are some specific questions that need to be answered and rules that need to be followed based on the type of policy you own. In the case of a health insurance policy review, it is important that you make note of any necessary changes to your health, diet, and medication as prescribed by your doctor.3 For example, if you have just found out that you require insulin, you would want to take that into account when reviewing your policy details and double-check that your existing policy covers your medical needs. In addition, you would want to make sure that the diagnosis of any newly found disease or ailment wouldn’t increase your premium, and if it did, that it was affordable to you. Failing to do so may result in you being unable to afford your insurance premiums, leaving you in a bad place.
Reviewing a Disability Insurance Policy
Reviewing a disability insurance policy varies a little from other policies, as it acts to supplement your income in the event that you are rendered disabled by definition in the policy. The first thing to consider when reviewing a disability insurance policy is if their definition or qualifications of being “disabled” have changed. Changes to the definition of what it means to be disabled under your policy can put you at risk, so making sure the definition still fits your needs is paramount.4 In addition, you’ll want to double-check that the period of time in which you can claim disability insurance hasn’t taken a turn for the worse and that the cap to which you can collect hasn’t shrunk.4 Failing to review all of the above information has the potential to leave you worse for wear, so it’s paramount you review your disability insurance policy with care and attention.
In Closing…
Reviewing your insurance policy on an annual basis has the potential to save you money while also protecting you from the risk of financial calamity. Follow the golden rules mentioned, and work through policy specifics to complete an effective insurance policy checkup with the potential to save you money, shield you from the worst, and prepare yourself for the future.