More important as you get older

So,you are seriously starting to think about your retirement. The kids are finally more independent, the mortgage is less than it was, and the super is more than it was.

You look at your monthly bank statements and one particular debit is always there – the insurance premium.

You have been paying it diligently for years now, maybe decades. But, for what? You’ve not claimed and ‘gained’ anything so far.

At this stage and age, it might be very tempting to cancel your policies and save a few dollars.

Before you do, just consider what you could be losing in a future that’s not yet written. It could be hundreds of thousands of dollars.

More to the point it could be your home, your lifestyle, or your health – the very thing you are hoping to protect.

Statistically you are more likely to claim the older you get. Look at these figures: Type of cover – Income protection: Average age people cancel policy, 45; average age people make a claim, 46. Total and permanent disability: 49, 48. Trauma insurance: 44, 49.

People often do not realise an insurance policy is not an ‘all or nothing’ concept and there are options available.

For example, as you get older and your debts and commitments reduce, so might the level of cover you require.

When cover is reduced, so is the premium. Take care though, once a policy is in place it’s easy to reduce the cover but much harder to increase the amount, particularly as you get older.

It often only takes a phone call to lower the amount but countless medical tests to increase it or apply again.

Before you rush off and reduce your cover, it’s important to tailor the amount of cover to your potentially changing circumstances, and this is where your financial planner can help.

There are many other options available including requesting a temporary freeze on the premiums; paying annually instead of monthly; moving your cover into your super fund – this is not applicable to all insurance however; or given that your adult children will usually be the ones who will eventually benefit, ask them to share the cost of the premiums.

The basic idea of insurance is not to put you in a better position than you were – it’s there to protect what you have.

Regardless of what age you are, think twice about cancelling insurance completely. There are always other options available.

Ask your financial adviser for guidance before you make any decisions. • The information provided in this article is general in nature only and does not constitute personal financial advice