Upgrade Old Life Insurance Policy, or Add a New Policy?

• 

  holdenmg on 07/07/2020 - 17:05

  +2

  Hi,
  It looks like you might have Term Life with Future Benefit (meaning you can increase your Cover by $100K without Medical Evidence).
  But consider that, from what you have said, you are really locking away available funds until the clogs are popped…
  Maybe there are other options to consider.
  Certainly, don't cancel your cover. Maybe see if an extra $100K cover is what you need.

  • 

    IVI on 08/07/2020 - 00:19

    +1

    The Barefoot Investor offers a tip on negotiating the cost down
    a bit on Insurance [eg, after 1st year]. He gives his reader
    a little Script to use on the phone when making the call.

    I'd think it'd be good to get the Cost down first, ie,
    before raising the amount to be paid-out at end-of-Life.

    (My logic is that you might be able to apply the Saving
    to [part of] the amount, by which your final premium will rise.

    Barefoot may also have more tips, that I don't recall ATM…

• 

  Seraphin7 on 07/07/2020 - 17:32

  +1

  It's not just as easy as "doubling your contributions" to increase your pay out.

  Without knowing the particulars of your policy, you will have been covered way back when for conditions A through Z. You'll be covered for those for the life of the policy under the terms of that policy.

  Any new/additional cover will be provided under the terms of today's policy that may be markedly different to your existing one (perhaps better, perhaps worse) whether you take it with Noble Oak or anyone else. It will certainly exclude any pre-existing conditions you have now and so will likely be further quite different to your current arrangement.

  Life insurance is arguably the most technically complex area of retail financial services and so you must be precisely dure as to what you are/aren't getting involved in.

• 

  bobz79 on 07/07/2020 - 18:24

  +2

  Keep in mind, there are some gotcha's for multiple policies:

  1) if you take out two life insurance policies with the same insurer, some insurers may apply the maximum cover amount to both policies. Therefore, your insurer may need to reduce your cover so that you don’t exceed the maximum limit.

  2) you should be able to claim on multiple insurance policies, provided each of your funds or accounts are independent from one another - I have heard this is at the underwriter level, not reseller!

  There are many companies offering insurance policies in the Australian market, but many are in fact underwritten by a limited number of insurers operating under various brand names. Four companies account for three-quarters of the general insurance market. They are Insurance Australia Group (IAG) with 29% of the market, Suncorp Group with 27%, QBE with 10%, Allianz with 8%.

  What it means is that, if your say Coles Policy and NRMA Policy are both from IAG, they will payout only one (the max among two).

  https://www.canstar.com.au/life-insurance/multiple-life-insu…

  • 

    mbck on 07/07/2020 - 19:45

    +1

    This right here.

    They will only pay over what the other policies are due for you.

    Eg, You pay policy A for 250k payout. You pay policy B for a 500k payout. You will receive 250k from policy A, and 250k from policy B.

    Keep in mind as well, policy A insurer may ask you to claim from policy B instead and vice versa ->ie, more headache.

    • 

      [Deactivated] on 07/07/2020 - 20:05

      +1

      Not really re headaches, you're dead, not your problem.

• 

  uniqualz on 08/07/2020 - 10:13

  Thanks everyone for the astounding replies. Helpful and amazingly knowledgeable, as always. I'll trawl through some online info and edumercate myself a little more before acting.

• 

  aaruu on 23/07/2020 - 23:34

  I would recommend to take professional advice before taking any step/ amending anything. Most financial institutions provide first session free of cost with no obligation. Try contacting your local bank branch to discuss with their financial planner/ advisor. They can provide personal advice tailored to your situation & needs. Online forums might not cover all aspects.