We all know the pinch of troubled economic times and financial setbacks. It is wise to evaluate your budget every once in a while; listing all your income, investments and expenses.
Curbing expenses and cutting unnecessary spending is prudent. Diversifying investments and reorganizing your investment portfolio is also a good idea. In contrast, cancelling your policies (health, life & short term insurance) is not wise at all.
Contrary to what many think, having policies is not a luxury but rather a necessity. Providing for your family in the event of an unplanned crisis is sensible and should be seen as a way of saving money, not wasting money.
If you cancel your policy and start a new policy when your economic circumstances change, you will most probably end up paying higher premiums or be excluded for certain benefits, depending on your age and change in physical health.
It is important to speak to your insurance company regarding options that they have available to help you save on premiums if you are unable to afford them for a while. Some insurers offer a premium break on their insurance premiums. Some offer a discount if you pay your premiums upfront, instead of monthly. This can reduce your insurance bills, if you can manage the immediate cash flow needs. The type of policy you have will determine what options are available.
Read and understand the terms of your policies well before making any knee-jerk decisions. If you are unable to “figure out” the terms and conditions, ask a financial advisor to assist you to make informed decisions regarding the policies you have.
Investigating different insurance options is also a good idea. Don’t be afraid of exploring the market and weighing different possibilities. Remember that there are a myriad of different policy options in the market and make sure to choose an affordable option that satisfies your own personal benefit requirements.
If you are considering changing your insurance cover, make sure that you know what the terms are of cancelling your existing cover and waiting periods with prospective cover to make sure that you are covered all the time.
