My No1 question on personal insurance: How much will this cost me? 

Over the years, it’s become quite clear that one of the main things that clients care about when seeking advice about insurance is the cost.  

Buying insurance online or choosing the default options from you bank might seem like a straightforward way to choose your cover, but those methods also bypass so many options which effect how, when and whether a claim is paid out.  

Getting the personal service of an expert insurance adviser provides wider options for both costs and coverage to suit individuals’ lifestyles, family setups and incomes. 

So, when you’re considering the cost of personal insurance, here are my four key rules: 

  • The 3% to 5% rule 

A simple balance sheet of income versus expenditure is usually enough to demonstrate the hole they would end up in if they lost their income and wanted their expenses to stay the same. Generally my clients in East Auckland tend to see their income divided into thirds: a third goes on tax, a third on their living arrangements (either rental or mortgage payments), and a third left over to play with. Allocating between 3 and 5% of their income to personal insurance ought to protect all of this so that if you can’t keep working, you can maintain your current lifestyle.  

  • Learn the loadings 

Lifestyle choices are going to have an impact on premiums – for example, the accepted medical risks around smoking mean that smokers pay higher premiums for health and life insurance. Other factors that can affect the cost of cover (positively and negatively) include gender, age, whether you’ve had policies before, genetics (some insurers will ask to see results if you’ve taken genetic tests before), health and previous illnesses. 

  • Tailor your options and balance your coverage specific to your needs 

There are so many ways to mitigate the cost of insurance from bundling (for example, discounted life insurance when buying health insurance), to extending wait periods or altering the terms over which benefits are paid out (for example, protecting your income so it’s paid out for five years as opposed to until you’re 65). Each case is different: if you have a spouse or children, then you’ll want a different balance of personal insurance than if you are simply protecting your own lifestyle if you lost your income or suffered some kind of long-term illness or trauma.   

  • Make the most of the added value of an adviser 

An expert insurance adviser has access to a range of insurance companies’ deals and understands how their specific bundles and benefits can affect both the initial cost of premiums and the way any claims are paid out. A conversation with an adviser can often unpick some of the tangled language from policies so you understand what it is you are buying and what you are covering (in itself a cost-saving strategy over the long-term when it comes to ensuring payouts), but it can also help an adviser find the best value policies for you and your family’s needs. 

If you want a straightforward explanation about the basic cost of your personal insurance as well as more information about all of our personal insurance products at Phil Robinson Insurance, you can arrange a free, no-obligation consultation which can be either over the phone or in person, by calling me on 021 313231 or 09 320 3819, or direct via the website.