01 Apr The Insider’s Advantage
Unlike your car insurance, most life insurers offer what’s known as ‘guaranteed renewable’ policies – meaning that each year your policy is renewed, the insurer must continue to cover you under the same terms and conditions.
So regardless of whether your health has declined or you’ve taken up new activities, they cannot revoke your cover or change what you’re covered for.
For example, if you’re diagnosed with diabetes or even choose to start base jumping two years after you take out your policy, you’re guaranteed to have the same cover, for the same price. In fact, you don’t even have to tell your insurer about these changes.
An added benefit of this is that when most insurers make improvements to policy terms that benefit you, they will automatically include them in your existing policy – at no extra cost.
If your occupation becomes riskier, you don’t have to tell your insurer. But if you do, they generally won’t increase premiums, insure you for less, or change your benefits. However, if your occupation becomes less risky, make sure you tell your insurer as your premiums could be reduced.
The movement here is completely in your favour.
Look into future insurability, where you can increase your cover without any medicals when major life events occur (e.g. you get married or take on a larger mortgage).
The bottom line is, once an insurer takes you on, they take on the risk. So no matter how your behaviours change, you’re guaranteed the terms of your policy from the day you took it out. And, in some instances, you can improve your benefits, or reduce your premium, without additional risks or costs.
Master Your Money Now is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL No. 236523. Head Office: Level 2, Cnr Maroochydore Road & Evan Street Maroochydore QLD 4558 Phone: 07 5406 5000. And is an Authorised Credit Representative of Outsource Financial Pty LtdABN 42 131 090 705Australian Credit Licence No. 384324 Birkenhead Point Brand Outlet 19 Roseby St, Drummoyne NSW 2047. Infocus Securities Australia Pty LtdABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523
Head Office: PO Box 1856 Sunshine Plaza QLD 4558 Phone: 07 5406 5000