A new year is an opportunity to start over and re-evaluate your life and career. While you are taking stock of the past year and thinking about the future, have you taken a moment to re-evaluate your short-term insurance?
Insurance is a necessary expense, like rent or the electricity bill, which most people grudgingly accept as a set expense that can't yield any benefit. Yet it isn't.
At the end of the day, your insurance policy is a guarantee for your family, business, career and retirement. But it can be more. It can help you manage your monthly expenses, reduce your risk, and with the right insurance company, it can build your wealth.
Add everything new
When you get married, have a baby, buy a new car or open a new branch, insurance is one of the first things on your mind, which is the right thing to do. But there are situations in which a recent change requires you to rethink your insurance policies. For example:
- If your teen has a newly acquired driver’s licence, you need to add them to your car insurance. That way, if there is an accident when your teen uses your car, you are still are covered.
- You probably acquired new assets for the house over the year, especially over the holiday season. It could be a new lounge suite, a renovated kitchen, or electronics like a TV. In that case, your home insurance needs to be updated to cover these further improvements or assets.
- If your business has added assets, changed operations, or provides new services, then you should ensure that your business insurance covers them all.
Recognise changes that affect your insurance policy
You can further provide full coverage or reduce premiums depending on your life or work changes. For example:
- A change of address can affect your car, home and business insurance premiums. Some areas are safer, less prone to environmental damage, or closer to civil protection from natural disasters and military attacks. If you move your business to a safer location, your risk has substantially decreased.
- If you have added security to your assets, you have reduced the risk of theft and increased your assets' chances of recovery. You may achieve this through additions like a GPS tracker on your car, burglar bars to your home, or CCTV cameras on your business premises.
How can you adjust your policy?
Every year, something new happens in your life. It can be good or bad. In either case, your insurance can play a part in either reducing your expenses or your financial risk.
As you evaluate your insurance policies, you should consider what you want to pay for the excess. Excess is the amount you want to pay when you make a short-term insurance claim. It is the amount you are ready to take out of pocket in the event of a claim. If you increase the excess, then you can lower your monthly premiums. If you decrease your excess, then your monthly premiums will increase. Depending on your situation, adjusting your excess can help manage your monthly cash flow and financial risk when you make a claim as an individual or business.
When customers buy insurance, they usually think it's a one and done deal, but may not be aware of how circumstances can change. Something as simple as the value of an asset can vary depending on which term the policy uses. For example, assets can have two values:
- Market value is what the asset is worth minus the wear and tear. So if you bought a car for R50 000, it would have a lower market value – lets say of R35 000, due to mileage, vehicle condition, service history and accident reports.
- Retail value is the same asset's price, but brand new. The car above's retail value would be what a car dealer is willing to sell it for – R50 000 since it is brand new.
Choosing which value to use can have an impact on your premiums. Insurers usually advise clients to use the retail value and not the market value, especially for car insurance. If your asset is written off at the end of the day, you can easily buy a similar one at a retail price, rather than market price.
Make the most of short-term value-added services
Not enough people take advantage of the short-term value-added services that come with their insurance. The services come at no additional cost to your person or wealth; they actually add to it. Using the value-added services benefits both you and the insurance provider.
Think about it. The more comfortable, more productive and stress-free your life is, the better for everyone. For example, if you forget to pay your vehicle licence, you will struggle to go to school or work, or conduct your business, resulting in a lower income for you in the long term. That's why PPS offers Licence Assist – a painless licence renewal service, for its car insurance customers. Some of the other short-term value-added services that PPS offers include:
- Fine Assist lets you know when you are fined. You also get up to 50% discount for traffic fines through the service.
- Protect Me is a mobile panic button. It can operate from anywhere and at any time. Once activated, the nearest security organisation will come to your aid. This benefit extends to family members who live with you.
- ID Protect is an alert that activates when someone attempts a fraudulent activity using your identity.
- Road Assistance is available when you are in need of towing, jump-starting, tyre changing or fuel delivery if you run out of fuel. The service is available 24/7.
- Home Drive Assist is a service that will drive you home or get you safely from point A to point B.
- Home Assistance provides access to the services you need should you experience plumbing and/or electrical damages or breakdown at your home or business.
- Medical Assistance provides 24-hour emergency advice and an assistance centre.
What you need to know about choosing short-term insurance
A time will come when you need to take up insurance or switch providers. Considering the variety of options available in the market, you may get confused along the way. Fortunately, you can use some simple tips to sort through the options. Here’s how to choose an insurance provider:
- Use online reviews. But make sure you understand the purpose of the reviews. Was the customer speaking about a claims experience, payment experience, interaction with a single representative or their general experience? This will help you determine if the incident was about the product, service or a person, and whether the review is relevant to your needs or not.
- Use rankings, comparisons and surveys to evaluate how an insurance company stacks up against its competition.
- Get to know who you are buying your insurance from. Whether it is a local office, agent, or broker, the firm you are buying your insurance from will be your point of contact. Their professionalism, service record and customer service will affect your experience.
- Understand the service model of the insurance provider. Providers can sell insurance directly or through a network. Understanding the model will help you to anticipate the level of support to expect or how claims are handled (is it handled internally or by an external adjustment claims firm).
- Look at the company's history and financial standing. You want a company with experience and a track record, especially when it comes to its financial reputation. Take PPS which has been around since 1941 and which operates on the ethos of mutuality. This means it belongs to its members, and those with qualifying life and additional products get to share in the profits of the company.
There are a number of ways to buy insurance. You can choose what works for you, whether it is to:
- Buy directly from the insurance provider online, through the phone, or a tied agent.
- Use a broker or an independent agent. They usually have multiple products from multiple insurance providers, so be prepared to have options.
- Use an insurance aggregator. Insurance aggregators provide information and sign up services. They usually hand over your policy to the insurance provider. So, make sure you clearly understand what happens to your policy after signing up.
Get more from your insurance with PPS Profit-Share and Profit-Share Cross-Holdings Booster
Insurance is a financial instrument that is smart to have, and one can turn it into an asset. If you buy your insurance from PPS, you will be doing more than managing risk; you will be part of its investment and savings group. PPS operates on the ethos of mutuality; therefore, everything belongs to its policyholders, including profits. Here's how you can turn an insurance policy into something more:
- Each PPS life product as well as any subsequent qualifying PPS product that you hold earns you a share of PPS profits, which is paid into your Profit-Share Account.
- Your Profit-Share Account is automatically opened once you hold a qualifying PPS life product.
- There are no extra fees or paperwork on your side; just pure profit for holding the right policy. The money belongs to you after all.
- You will not be penalised for your health status or how much you claim in your policy; all you have to do is hold one, and you get a share of the profits.
But that's not all. Once you hold qualifying products across a range of diverse PPS products such as PPS car and home insurance, you become eligible for the PPS Profit-Share Cross-Holdings Booster. This boosts your overall Profit-Share by as much as 27%, depending on how many qualifying products you hold.
Manage your insurance policies
You've been hands-on with your career, life and work. Apply the same energy to managing your insurance. Please don't leave it to chance. If you are facing cash challenges, talk to your insurance provider; there is a solution out there. If you are doing well and growing, it's even more critical that you secure your assets and income. As you look through your insurance options, look for a provider that goes beyond insurance coverage and helps you build your wealth. For guidance and assistance on choosing short-term products, contact us.