Adjust your insurance after year-end review

This was originally published on Monday, December 8, 2014, in the Pacific Daily News. Click here to subscribe to the PDN.

As the year comes to an end, it is time to reflect on what has occurred over the past 12 months. This should include your finances as well.

By reviewing your finances, you can prepare your New Year’s goals. One of the items on your review checklist should be your insurance policies. Many of us let our policies go on autopilot and let them automatically renew. Your life situation changes throughout the year and your insurance needs will, too.

Take some time and review if your policies still cover your needs.

Life insurance

• One of the most important facets of life insurance is your beneficiary. If you went through a divorce or added a new family member, you may want to change your beneficiaries. If a beneficiary passed away, you need to name a new one.

• Have your needs changed? By reviewing your policy, you may have decided that you need to increase or decrease your policy.

• Has your health changed? Has your health improved? Did you stop smoking or loose a significant amount of weight? Or has your health declined? Changes in your health can have a profound effect on the cost of your insurance. Check with your insurance company if a physical is needed before making any changes.

• Does the amount of insurance cover your needs? If your coverage is inadequate, you may need to increase your policy or buy a new one. If your coverage exceeds what you need, you may want to realign your policy by decreasing it or adding a new beneficiary.

• Is your life insurance and estate plan integrated? If you modified your estate plan recently, ensure that your life insurance has been included. You want to ensure that your estate and life insurance do not have gaps. Gaps between the two may cause benefits from your life insurance to cover estate taxes and not go to your beneficiaries.

Car insurance

• Who is covered? Did you add a new driver, maybe by marriage, or your child recently obtained a driver’s license? Maybe you removed a driver after a divorce or your child has left home.

• Are all your vehicles covered? Did you recently sell or buy a new car? If you sold your vehicle, remove it from your policy. If your vehicle is getting up in years, you may not need the same amount of insurance.

• Are you familiar with your claims process? What are you supposed to do right after an accident? How long do you have to file a claim? Do you know how much your deductible is? Some insurance companies have apps for your smartphone to file claims.

• Did your income change? If you are making more money, you may want to consider increasing your coverage and vice versa.

• Do you qualify for a discount? If you haven’t had a recent accident, you retired, installed an anti-theft system, or if your teen driver earned good grades, you may qualify for a discount. Talk to your insurance agent/broker about the discounts they offer. You may be surprised just how much you can save.

• Do you need all the coverage for which you are paying? Maybe you want to purchase additional coverage such as typhoon, rental car or roadside assistance.

All your insurance policies should be reviewed to check if you are getting the best coverage and rates.

Bundling policies will give you a significant discount. You may want to compare prices of other companies to get the best coverage.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at http://www.moneymattersguam.wordpress.com.

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