In theory, your insurance agent is supposed to check on you every six months. Unless you have an agent like mine. “Why, is she careless?” Nah. She stopped calling because I used every meeting to describe diseases I think I have. They typically feature words like “oozing” and “pustule”, and I have pictures from medical books. That I show her over lunch. But anyway, it’s a good idea to set up your own insurance reviews and actually figure out where you’re at. Here’s how:
Step 1: Set a Review Date
Set a review date for your insurance policies. This is usually done every three to five years. Any earlier, and you might not want to switch policies anyway (you might forfeit some returns).
Most insurance agents call every six months anyway, which makes them a perfect reminder system. When you talk to yours, make it a habit to end with this question:
“By the way, when was the last time we looked over my payouts, coverage, etc.?”
If it’s been five years or more, consider making an appointment. You’ll want them to walk you through the benefits, returns, conditions, etc. again. Because in a short while, you’ll be shopping around and seeing how it compares to current policies.
Step 2: Understand How Much Your Policy Costs
Quick, without checking: How much in commissions (approximately) are you paying the agent? How about the insurance company itself?
You can find these in the benefits illustration. That’s the reel of numbers the insurance agent gave you, donkey’s years ago when she cornered you in Burger King. There are five main columns to look at:
Annualised Premium – How much you pay in premiums every year.
Total Premiums – The total you’ve paid so far, in premiums
Total Distribution Cost – Most of this money is given to the agent, as commissions.
Non-Guaranteed Surrender Value – This is the big payout you’ll get, when you surrender the policy. It’s guesswork, as the term “non-guaranteed” implies. You may be getting a lot less than what’s stated here.
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