The importance of a timely “warrant of fitness”
A “warrant of fitness” insurance policy review I recently undertook highlighted the value of such an important exercise.
I put in place a client’s insurances in 2012, when:
- He was the sole income earner.
- He and his wife had taken out a substantial mortgage.
- His wife was not earning income.
- Their two children were age 9 and 6.
Given these circumstances, my clients required substantial Life, Trauma, Mortgage Protection and Medical cover to ensure that in the event of incapacitation and inability to earn income, or premature death, the family needed to be securely protected.
Ready for an insurance review?
Each successive year, I routinely contacted my clients to see if they wished to review their cover, and, each time, they were happy to let things run as they were.
However, after the 9th policy anniversary notice in January 2021, I contacted them, noting that the premium was starting to get quite expensive and suggesting that as the family’s circumstances would have changed after 9 years, it was very timely to undertake a review. They agreed wholeheartedly, as after 9 years, their financial position had changed dramatically:
- Both parents were now earning good, full-time incomes.
- The children were now 21 and 18, and starting to forge their own careers.
- The mortgage had been dramatically reduced.
Whereas, 9 years ago, they required the shortest wait period available (4 weeks) and the longest benefit payment period (to age 65) for the Mortgage Protection cover, they were now happy to switch to a 13-week wait and a 5-year benefit payment period. With the reduced outstanding mortgage and the children now virtually independent, my clients’ life cover could also be reduced.
At the same time, they made use of their existing Future Insurability Benefit, which allowed them to increase the Trauma cover without the need for a full application or medical underwriting.
An insurance policy review that pays
The net result: a saving of $200 per month, $2,400 per year – money which is best in the client’s pocket – while still having an excellent protection plan which is now suited to their current needs.
A “warrant of fitness” insurance review doesn’t necessarily mean an increase in your premiums. To the contrary, it can mean a substantial cost saving!
It’s what we do!
Theo and Cristina Simeonidis are Registered Financial Adviser, living and working in Millwater on the Hibiscus Coast, and specialising in personal and business insurances. Theo can be contacted on 027 248 9320, Cristina on 021 868 280 or email firstname.lastname@example.org. Any assistance is provided on a free, no-obligation basis. A disclosure statement is available free of charge on request.