I get it, insurance isn’t the most thrilling topic, but as I always say, insurance is the one thing you need but never want to have to use. Insurance is one those critical tools that can help provide a sense of security and peace of mind for you, and your loved ones in the event of tragedy.
Our lives are always changing, which can adjust our financial needs, and understanding how this ties into your insurance coverage is paramount.
I’m going to break down why reviewing your insurance and understanding the process of renewing or re-writing your policies is so important.
Let’s talk the “why?”
Before simply renewing, it’s crucial to comprehend why looking at your options and the possibility of rewriting vs. renewing is important. Let’s review a few of the pros and cons.
- A downside of renewing: If you simply let your policy transition to its new term, this usually comes with significantly higher premiums than your original premium cost. This can be avoided by being proactive and consulting with your insurance professional about looking at options or rewriting your policy with the same carrier or others before your renewal comes due. Rewriting a new policy may increase your premiums slightly, but still at a lower cost than your original renewal premium.
- Your coverage stays the same: As mentioned above, as our lives are constantly evolving, so are our finances. If your net worth has increased, increasing your coverage with a new policy to reflect your updated needs is key. This will ensure you and your family are financially protected, and will assist in covering any mortgages, debts etc. when needed. If you simply renew your current policy, your coverage may not fully financially protect you.
- Assessing your health: If your health has changed, and you’ve developed health issues since you first purchased your policy, even at a higher cost, it may be easier and more affordable to renew your existing policy than applying for a new one. This is why consulting with your insurance professional beforehand is so important.
Let’s review tips for renewal or rewriting.
If you decide to renew or rewrite your policy, let’s review some helpful tips to make the most of your coverage:
- Start the process early: It’s best practice to decide whether to renew or rewrite your policy a few months before your policy expires. This will ensure you have ample time to weigh your options and find the best solution.
- Reassess your coverage needs: As we’ve mentioned a few times, as our lives and financial needs change, so may our insurance coverage need. For example, if your mortgage is paid off, or your children are now grown, you may not require the same amount of coverage. Or vice versa – you may now have a mortgage and young kids and may need to increase your coverage. Reassess your coverage needs and adjust accordingly.
- Shop around for better rates: Even though your current provider offers renewal options, there may be better deals with other providers. Take the time and care to compare other providers and their options with quotes to review as you may be able to find a more affordable policy with the same, or more coverage.
- Consult with a professional: Consulting with your, or an insurance professional can be incredibly helpful if you’re unsure whether to renew or rewrite your policy. Professionals can provide personalized advice and help you compare quotes to find a policy that best fits your needs.
Finally – key factors to consider.
As you weigh your options, consider these key factors.
- Age: Our age plays a significant role in determining our premiums. The older we get, the more expensive our premiums will be.
- Health: If our health declines, it may be more difficult to achieve affordable premiums by applying for a new policy, as the provider will require new medical underwriting.
- Dependents: If your family still depends on your income, maintaining proper and current coverage is essential for financial security.
- Debts: If you have significant debts, such as a mortgage or loans, having appropriate coverage is a smart way to ensure these obligations are paid off in the event of death.
- Financial goals: Factor in whether your current coverage aligns with your long-term financial goals, including retirement and estate planning.
In Summary, deciding whether to renew or rewrite your policy is a sensible financial decision, which has to be made while keeping in view present needs and future goals. It’s important to understand the options for renewing your current policy, moving forward with a new policy or another provider, or changing your coverage or plan altogether.
Comparing quotes and consulting with an insurance professional will serve to better equip you to make an informed decision that will help protect you and your loved ones financially.
Take the time to weigh your options and find what best suits your needs!
