In fact that’s exactly why I started my company – because it doesn’t have to be like that. I promised you when I started this blog, that I’d help you save money. Part of that is learning how to play the insurance game.
If you can go into a new policy understanding exactly what you’re buying, you’re halfway there. But how many people do actually understand all that jargon?
Here’s my guide to demystifying the small print.
Buying Life Insurance? Watch out for decreasing term and reviewable policies
There are many ways to buy life insurance but the variety of terms policies offer can be mindboggling. A “level term” is always a safe option: your premium (the amount you pay) should stay the same, as will the payout (the amount you receive), for the life of the policy. This should be enough to clear your debts, pay off your house and ideally leave some money to support your family too. Sometimes, you can save money initially by taking out a “decreasing term” – this means your payout will decrease over time (this might be sufficient to clear your mortgage debt but you might want to consider funeral costs, living costs and other debts for those left behind). “Reviewable” policies can also hold a sting in the tail – as, after a fixed period of time, the insurers can review your premium and what started out cheap, could get very costly after all.
Travel Insurance – watch your excesses
You’re probably familiar with choosing your excess – and how a bigger excess can make the whole policy slightly more affordable. However, with some complex policies, like travel, it’s worth checking out just how many individual sections of cover have excesses. It’s likely you have a main excess, plus one for medical costs and another for belongings etc and that means in some circumstances, your claim could leave you with an excess that far exceeds your original expectations. (This isn’t such an issue if you are travelling in Europe and have an EHIC card as excesses will be covered).
Income Protection – a tricky beast
There’s nothing straightforward about buying Income Protection, that’s for sure, and it’s why I like to deal one-on-one with clients to ensure they get the cover that suits their needs. If you’re choosing it alone, however, it’s worth checking how the policy is underwritten. It’s not always as simple as paying out when you’re off work, sick. If you’re covered for “own occupation” then it is that simple, but many policies have terms which include the phrases “work tasks” or “activities of daily living”. This is important: “work tasks” means that as long as you can physically do the tasks associated with your job, your cover won’t pay out, regardless of whether you are mentally up to being at work. “Activities of daily living” is even more restrictive and you won’t see a payout for as long as you can undertake a specific list of basic living tasks – regardless of how ill you may be otherwise. It’s always worth reading the small print.
And finally, my golden rule, which applies to almost every policy: declare everything
Policies from medical insurance, travel insurance, income protection, life and more will ask you to declare any pre-existing conditions. This is the biggest pitfall you can fall into, simply by not taking enough time to think about it at the start – it’s such a problem, I’ve blogged about it before.
Put simply: declare everything and don’t forget a thing, even if it seems trivial to you. Those blood pressure tablets that are just a part of everyday life now, could be the difference between success and failure when the time comes to claim, should you forget to mention them. The key thing to remember is that it doesn’t matter whether the claim has anything to do with the condition – the policy is wholly void should you forget to declare anything.
PS If this still seems daunting, give me a call (0800 690 6990). I’m independent, my service is entirely free and there’s never any obligation to buy. With Westcountry Health Care, you’ll know you’re covered and you’ll have my personal Crisis Support in the event of any emergency.