Insurance is a necessary part of our daily life to protect dependents, assets and even our income. Here are three simple tips when it comes to all types of insurance – life, health and general.
1. Check your life and health cover
When was the last time you reviewed your cover? You could be over-insured, and you could also require cover where you don't have it. Now may be the time to do a review on all your insurances. Are you getting the best value? What happens if you or your spouse die or become permanently incapacitated?
Most employers pay full salary for six months, then 50% for the next six months after which you are on your own. Income protection is the only type of cover on which tax relief at your marginal rate is available. This pays 75% of your normal income, less any social welfare benefits until you return to work or your pension kicks in.
How are you fixed in this scenario? If you took out life cover (with home mortgages it is mandatory if you are aged under 50) you may have been a smoker at the time. Once you are smoke free for 12 months, you could save yourself over 50% of the annual premiums – worth checking out.
Also remember once you have dependents, you will need additional separate cover until those same children have completed 3rd level education, when your responsibility as a parent should end – at least in theory!
You can calculate this requirement by multiplying your joint net annual income by 10, minus any Death In Service benefits until completion of your youngest child's 3rd level education.
2. Compare health insurances
With only three health insurers in Ireland (VHI, LAYA and Irish Life Health), it is really important you continually update yourself on the best deal for you. The Health Insurance Authority does an excellent comparison of all three and updates it regularly.
It can be confusing and you need to review each year as your circumstances may change. You can find a similar comparison tool at www.bonkers.ie.
3. Check your general insurances
When it comes to your home, buildings and contents, is your cover competitive? If you have commercial or residential investment property insurance, is that competitive?
Car insurance still remains the least loyal insurance for consumers. Taking that lead, when your car insurance renewal comes through that letterbox, the first thing you should be doing is calling a competitor for their rates.
Do you also require any special risk insurance that you "risked" being without until now? Life is a balancing act sometimes, but you may not be so "lucky" next year. For example, your mobile home insurance! Public liability, professional indemnity, PC virus insurance, even insuring for that round of drink after a hole in one on the golf course. These things stack up and should be protected.
A recent Competition & Consumer Protection Commission (CCPC) survey looked at seven sample consumers across the country and found that many could could make significant savings on home insurance. Where all companies provided a quote, the average potential saving was €318!
A quick look through the survey shows how much saving could be done. It listed potential savings of up to €362 on the price of insurance for a 2-bed terraced house in Waterford City – the most expensive quote was €546, while the cheapest quote provided was for €184. The average quote for this profile was €278 (Profile 7).
Whereas in Dublin, the biggest percentage difference in quotes provided was 341% for contents cover only, of €26,000 for a 2-bed apartment. The most expensive quote was €389 and the cheapest quote was €88. The average quote for this profile was €181 (Profile 2).
To sum up in two words, the advice is shop around for any type of insurance and review – better in your pocket.