MoneySmart

Financial tips and money-saving advice from Goldenwest Credit Union

Annual Insurance Review

June 28, 2020

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We tend to forget the value of insurance until we actually need it. As far back as 4,000 BC, the Chinese found value in insuring their goods by mixing and distributing various goods across multiple ships in order to minimize loss due to shipwreck. Today, we can insure just about anything including pets and vacations, and on June 28th we celebrate National Insurance Day. While we don’t know the exact origin of this day, we do know it offers a great opportunity to review our insurance needs. A lot can change throughout the course of a year, so use this day to make sure you are properly covered and possibly find savings. Beyond National Insurance Day, there could be many opportunities throughout the year to review your insurance policies.

When you should review insurance policies:

1. Family status change

If you’re moving on from bachelor-pad status to married life, or if you’re upgrading your sports car to a minivan, you’ll want to update your insurance policy to protect your growing family. Losing a family member through death or divorce should also prompt an insurance review. It is important to keep your beneficiary designations up to date after any additions or subtractions in your family.

2. Home remodel or purchase

Updating your home will likely increase the replacement cost of your home. Some of those updates may qualify you for discounts on your insurance such as a home security system or carbon monoxide alarms. Upgrading or downsizing your home can cause you to be over or under-insured.

3. Employment change

As you accept new positions with your current company or a new one, understand your healthcare options. Beyond healthcare, what kind of disability and life insurance is provided, if any? Employment changes should encourage you to compare your insurance policy to your family’s insurance needs.

4. New loan

A new loan means more debt. Whether it’s a car loan or a business loan, make sure your liability is high enough to protect you and your family against any risks.

5. Health changes

Are you following through on that health resolution? Healthier habits such as quitting smoking, lowering cholesterol or blood pressure, regular exercising, and healthier eating can lead to discounts on your life insurance policy and reapplying may benefit you.

6. Other Personal Milestones

Other opportunities for you to find savings on your insurance is right after a personal achievement or milestone including birthdays, reaching a higher credit score, earning a degree, and having violations drop off your record. The Zebra offers a great breakdown of how each of these can affect your rates and how to take advantage.

7. Annually

Even if you haven’t had a major change in your life over the course of the year, you should still review your insurance once a year. It’s good to remind yourself of the coverages you’re paying for and to make/update an insurance inventory. An insurance review is also a great time to ask your agent about potential discounts.

These are just a few reasons to review your insurance annually. In reality, you should be checking your insurance needs and policies anytime your policy is about to expire or anytime a big change has happened in your life. Reviewing your insurance needs can save you money both in the long term and the short term.

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