Year-end insurance checklist

Having healthy, current, and appropriate insurance coverage is important to an individual’s financial health. A regular maintenance check for life, health, and general insurance products can be a useful way to review the portfolio, weed out excess, or balance unhedged risks. This exercise can also map any incremental changes in risk metrics throughout the year to changes in the product that cover them.

General controls

Insurance as a marketplace is evolving, with new features being introduced every year. Zero-cost insurance in term life insurance, wellness as a segment in health insurance, and on/off in auto insurance are some of the year’s developments. Policyholders can speak to providers and see if such upgrades are available on existing policies.

One clear improvement that has occurred is the digital reach of vendors via WhatsApp business accounts or apps, a rare post-Covid positive. Policyholders can check if they are up to date. Personal data, including the officer (if applicable) and contact details, are crucial details that can be checked/updated through such new methods. Another basic exercise worth doing is checking the premium payment status and automating it if necessary. Claims processing, if necessary, should not be hampered by such trivial oversights.

Product-specific checks

In term life insurance, the main test revolves around the value of human life (present value of future income over liabilities). It is not intended to downplay term insurance, but a significant increase in income status or the addition of a significant liability such as a home loan or business loan should be reflected in term insurance coverages. Liability insurance for non-working spouses can now be initiated, which is associated with a reasonable discount. A significant change in the health of the policyholder must be reported to both the risk insurer and the health insurance companies.

In health insurance, the extension of coverage by means of a no-claims bonus (if any) takes place automatically and must be checked. The PED counter, which counts down four or two years since the policy was purchased to cover pre-existing conditions, can also be checked. Family Floaters only allow for extensions of coverage as new family members (spouse or children) must be made promptly within 60 days. In health insurance, add-ons and supplements have a life of their own and separate testing can be beneficial.

As previously mentioned, new features covering critical illnesses, PED surrenders, higher floors, especially room rentals (new policies start at a single AC room) can be searched and added to existing policies. It may be advisable to notify the existing insurer of any top-up or super-top added in the year that differs from that of the existing insurer. Wellness points accumulated over the year and their expiration for renewal discounts can also be checked.

For auto or home insurance, an upgrade from nominal to functional can be considered. Depending on perceptions of threats from floods, theft and accidents, insurance may switch from motor liability insurance to comprehensive insurance or buildings-only insurance to home buildings and contents insurance. NCB similar to health insurance and IDV (Insurance Declared Value) similar to HLV in term life insurance can be checked for car insurance. More savings can be unlocked by turning the feature on or off in Auto Insurance.

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