Why Reviewing Your Insurance Policies Annually Is Important

By Theresa Semple

How many times during annual enrollment do you skim through the documents, then ask someone if anything changed and click on the same coverage you had last year? Don’t be embarrassed, you are not alone, others do this as well. This article is meant to enlighten you, so that you are prepared for this year’s annual enrollment process and to review all of your policies on an annual basis.

Insurance is a protective financial tool. It is meant to ensure that you have the coverage you need. Without proper coverage, you could pay more out of pocket than you had been prepared to do. Most organizations offer tiers of coverage. When you first join your employer, you look through each tier, select any extras you want and then lock it in. The next year, you skim the documents to see if there are any glaring changes, then lock in the same options.

Life Changes Each year your life changes1, it can be positive changes like marriages and children, it can be difficult changes like health issues or divorces. Additionally, changes in your personal medical status such as new or chronic conditions, aging parents or dependents with special needs could require updates as well. It is important to take stock of your life changes and review your policies to ensure you are properly covered. During the year if one of these changes happens, you do have a short window to make the necessary changes to your coverage, it is important to make the changes timely to avoid lack of coverage for new dependents.

Insurers frequently update policy terms, conditions, and premiums. Annual reviews help ensure that policyholders are aware of these changes. The changes may seem small to others, but your coverage should be reviewed at a personal level. For instance, a person with no medical issues doesn’t need the same level of insurance as a person with a chronic condition or with a history of illness. You want to make sure that when you go to the doctor, your visit can be covered.

Regulatory changes can have an effect on all forms of insurance such as medical insurance. The affordable care act, or the increase in Medicare tax can have an effect on the cost of annual coverage. Being underinsured is a costly issue.

Buying a new home, remodeling, or acquiring valuable assets like jewelry, electronics, and vehicles would also require a change to your personal lines of insurance. Additional changes that could affect coverage needs are new jobs, promotions, starting a business, retirement, and disability.

Regulations such as updates to minimum auto coverage requirements can affect policy needs. Reviewing your policies provides you an opportunity to discover new discounts or coverage options that may not have been available when the policy was first purchased.

Review to catch the coverage gaps

Over time, failure to update policies can result in coverage gaps, which could lead to financial hardship during a claim. Without regular reviews, policyholders might end up with redundant policies, like paying for separate coverages that are already included under another policy. Common scenarios, such as homeowners missing flood insurance or auto insurance lacking updated coverage for inexperienced drivers are avoidable with regular reviews.

Inflation happens

Inflation affects the cost of repairs, replacement, and healthcare2, necessitating updated coverage limits. For homes and personal property, market values can change significantly, impacting the coverage needed. It is important to discuss the value of your personal property such as jewelry, electronics, and collectibles as they can change over time, requiring policy updates.

Annual reviews can identify opportunities for bundling policies (e.g., auto, and home) to save on premiums. Insurers offer loyalty discounts for long-term customers, which can be maximized during annual reviews. Comparing rates and coverage with other insurers can ensure that policyholders are getting the best value for their money.

Life Changes & Medical Coverage

Ensuring you have proper medical coverage is important to you and to your family. This will ensure that you and your dependents are properly covered in the event of an illness or throughout the treatment of a chronic illness. Annual reviews will provide you with the opportunity to review all of your options and select the one that best suits the needs of your dependents. This is also an opportunity to review your dependents. Did a dependent turn twenty-six, or get their own coverage? Did you suffer the loss of a dependent? This review allows you to update this information as well.

Reviewing your personal lines of insurance such as property and casualty will also ensure you are properly covered. Do you have enough coverage at home in the event of an emergency? In the event of your untimely passing, or the passing of a dependent? What about if something happens to your vehicle? During your annual review, you should ensure that you are satisfied with your standard of coverage.

Family protection

No one cares more about your family than you do, take the time to ensure you are protected adequately3. Insurance coverage is meant to financially protect you in several ways. However, it is only as effective as the coverage you choose. Take the time to thoroughly explore your options, insurance policies such as medical insurance only allow changes during certain life events, or during the annual enrollment process. Take advantage of these opportunities to review your coverage thoroughly, allowing you to feel comfortable with the coverage you have and that you are providing to your dependents.

You work hard to buy your home/rent your apartment and provide luxuries for yourself such as a car, electronics, and jewelry. Make sure they are protected as well. This way you can relax knowing that in the event of an emergency all of your property is covered.

Finally, there is no substitute for you. You support your family while you are alive. You can also provide for them in the event of your passing. Review your life insurance policies and ensure that you have enough coverage to support your family in the event of your untimely passing. Talking to your agents can help you ensure proper coverage for whatever happens in life. When was the last time you reviewed your policies?

To learn more, visit?Semple Solutions?now at?https://semplesolutionsllc.com/group-life-insurance?or call us at (732) 238-6734. Our professionals are here to answer your questions and help you find the best benefits for your employees and your business budget.