Insurance is essential for protecting your financial future, but that doesn’t mean you should pay more than necessary. Many people set up their life and health insurance plans and forget to review them regularly - often leading to unnecessary costs. By making a few strategic adjustments, you can reduce your premiums while keeping the right level of cover in place.
Here are some practical ways to lower your insurance costs without compromising protection.
Health Insurance: Adjust Your Excess and Review Your Cover
If you have health insurance, increasing your excess (the amount you pay upfront before your insurer covers the rest) is one of the simplest ways to reduce your premium. Many policies allow you to choose a higher excess in exchange for lower ongoing costs.
It’s also worth reviewing your policy to see if you’re paying for optional modules you don’t need. For example, if your policy includes cover for specialists or alternative therapies that you never use, removing these could provide instant savings.
Tip: Review your health policy annually and adjust as needed.
Income Protection: Adjust Waiting and Benefit Periods
Income protection provides a financial safety net if you’re unable to work due to illness or injury. While it’s crucial to have this cover in place, how it’s structured can significantly impact the cost.
- Increase your wait period: This is the time you need to be off work before your benefit starts paying. If you have an emergency fund or sick leave, consider extending this to reduce your premium.
- Decrease the benefit period: Instead of receiving payments until retirement age, you could opt for a shorter payout period (e.g., 2 or 5 years) to lower your costs.
Tip: A longer wait period and shorter benefit period can significantly lower premiums while still providing strong protection.
Life Insurance: Keep It Relevant to Your Needs
Life insurance is designed to provide financial support for your family or cover debts in the event of your passing. However, as your circumstances change, you might not need as much cover as before.
- If you’ve paid down your mortgage or reduced other debts, you may be able to decrease your cover to reflect your current risk levels.
- If you initially took out cover for dependent children, but they’re now financially independent, it may be time to review your policy.
Tip: Regularly check that your life insurance aligns with your current financial situation.
Remove Inflation Adjustments (If Cover Is for Reducing Debt)
Some life insurance policies automatically increase cover yearly to keep up with inflation. While this can be useful for income replacement, it’s not always necessary - especially if the policy is purely for mortgage protection. Since your mortgage is reducing over time, your cover might not need to increase annually.
Tip: If your life cover is primarily for mortgage protection, consider removing inflation adjustments to keep costs in check.
Final Thoughts
Insurance should be tailored to your needs - not a set-and-forget expense. Reviewing your policies regularly and making minor adjustments can lead to significant savings while ensuring you remain protected where it matters most.
If you’re unsure whether your current cover is still right for you, a financial adviser can help you make informed decisions. Get in touch with Finsol today to explore your options and optimise your insurance strategy.
This article is for general information only and does not constitute financial advice. Any changes to your insurance policies should be carefully considered and discussed with a qualified financial adviser to ensure they align with your personal circumstances and long-term goals.
