Insurance plays a big role in protecting ourselves, our families, and even our assets from unexpected events. But over time, our needs change, and so does the world around us.
That’s why it’s important to review our insurance portfolio regularly. Doing this on your own—also known as a DIY (Do-It-Yourself) insurance review—can save you time, money, and help ensure you have the right coverage in place.
This guide will walk you through the steps for a DIY insurance portfolio review. We’ll cover why a review is important, what to look for, and how to make sure your insurance meets your needs.
Why Review Your Insurance Portfolio?
Most people buy insurance and then put it aside, often forgetting to revisit it. However, as life changes, so do our insurance needs, making regular reviews essential.
Life events, like getting married, having children, buying a home, or starting a business, can create new responsibilities and risks that may require added or different insurance coverage. Ensuring that your insurance aligns with these new circumstances is a key part of staying properly protected.
Changes in health can also affect insurance needs. New medical conditions, for instance, might mean a need for more extensive health insurance or a different type of coverage that offers better protection for specific issues.
Insurance companies themselves often update their policies, premiums, and benefits. By reviewing your policies regularly, you stay informed of any new terms, benefits, or exclusions that may impact your coverage. This way, you’re not caught off guard by changes that might affect a future claim.
Finally, reviewing your insurance can reveal cost-saving opportunities. Over time, you might notice policies you no longer need or find ways to reduce your premiums. Regular reviews can help ensure you’re only paying for what truly benefits you, freeing up funds for other financial goals.
How to Start Your DIY Insurance Review
Step 1: Gather All Your Policies
To start your insurance review, gather all your policies and documents. This includes life, health, auto, home, disability, and any other types of coverage you might have. Collecting everything in one place helps create a clear view of your current coverage.
For each policy, list essential details such as the policy number, the insurance company, the type of coverage, the cost of the premium, the coverage amount, and the expiration date. Having this information at your fingertips simplifies the process of comparing policies and assessing their value.
By organizing these details, you’re better prepared to evaluate whether each policy still meets your needs and if adjustments might be beneficial.
Step 2: Assess Your Current Needs
Consider any major changes in your life over the past year or two, as these can affect your insurance needs. For instance, changes in your family, such as an increase in family size or new financial dependents, often call for adjustments in life or health insurance coverage to ensure adequate protection for everyone.
Your financial situation is another important factor. If your income has changed due to a new job, additional debts, or increased financial responsibilities, these shifts might mean you need different or more coverage to match your current lifestyle and obligations.
Health conditions, whether for you or family members, can also influence your insurance needs. New medical issues may require additional health coverage or a change in policy to ensure that treatment options are covered.
Lastly, any new assets, like a home, car, or other valuable items, often need protection. If you’ve made significant purchases recently, it may be time to consider adding new policies or increasing coverage on existing ones. Noting these changes will help you align your insurance with your current circumstances.
Step 3: Check for Gaps in Coverage
Now, compare your needs with the coverage you currently have. Ask yourself:
- Do you have enough life insurance to cover your family if something happens to you?
- Does your health insurance cover essential treatments or any new health conditions?
- Are your home and valuables insured to their current value?
- Do you have any coverage for income loss due to disability or illness?
If you find that your coverage falls short, it may be time to consider additional policies or increasing coverage limits.
Step 4: Evaluate Policy Costs and Deductibles
Once you’ve assessed your coverage, it’s important to review both your premiums and deductibles. Premiums are the amounts you pay regularly to keep your insurance active, while deductibles are what you pay out of pocket before the insurance kicks in. Even small adjustments here can lead to cost savings.
Comparing premiums across similar policies is a smart move. Many insurance providers offer competitive rates, and shopping around can sometimes reveal better deals or discounts that align with your budget without sacrificing coverage.
Consider adjusting your deductible as well. Opting for a higher deductible typically lowers your monthly premium, but it also means paying more out of pocket if you need to make a claim. Striking a balance here is key, making sure the deductible fits your ability to handle unexpected expenses if something does go wrong.
Bundling policies is another way to save. Many insurers offer discounts when you purchase multiple types of coverage from them, like combining home and auto insurance. This approach not only simplifies your insurance portfolio but can also result in significant premium reductions.
Step 5: Check for Overlapping or Unnecessary Coverage
It’s possible you’re paying for insurance you don’t need. For example, you may have purchased accidental death and dismemberment (AD&D) insurance, but your life insurance may already cover the same risk. Review each policy to identify and eliminate unnecessary or overlapping coverage.
Step 6: Make a Plan for Regular Reviews
Insurance needs can change quickly, so make it a habit to review your portfolio annually. Mark your calendar or set a reminder to review your insurance each year, or whenever you experience major life events.
Step 7: Seek Expert Advice When Necessary
While DIY reviews are cost-effective, sometimes complex situations call for an expert. If you’re unsure about certain policies, consult an insurance agent or financial planner. They can offer guidance and ensure you have the best coverage for your situation.
DIY Insurance Review Example
John, a 35-year-old father with two young children, has life, health, auto, and home insurance. Recently, he received a promotion, increasing his salary. With these changes, John decides to conduct an insurance review to make sure his policies still meet his family’s needs.
For life insurance, John realizes he needs more coverage to fully provide for his family’s future if something happens to him. He adjusts his policy to increase the coverage amount.
In reviewing his health insurance, John sees that while his plan covers most medical needs, his dental coverage is limited. To improve his family’s overall health benefits, he chooses to upgrade to a plan with better dental options.
John also finds that he’s been overpaying for auto insurance. After comparing rates, he switches to a different provider and reduces his monthly premiums, freeing up more of his budget.
Finally, he checks his homeowners’ insurance and confirms it covers the current market value of his home, which has gone up after recent renovations. This ensures his home is adequately protected.
Through this review, John aligns his insurance with his new circumstances, gaining peace of mind and saving money.
A DIY insurance portfolio review helps you stay in control of your coverage, ensuring it matches your current needs and budget. By taking these simple steps once a year, you can avoid overpaying, fill in gaps in coverage, and gain peace of mind knowing you’re financially protected. Remember, insurance is about being prepared, and a little regular maintenance can go a long way in keeping you and your loved ones safe.
Disclaimer
Every effort has been made to ensure the accuracy of the information provided, but no liability will be accepted for any loss or inconvenience caused by errors or omissions. The information and opinions presented are offered in good faith and based on sources considered reliable; however, no guarantees are made regarding their accuracy, completeness, or correctness. The author and publisher bear no responsibility for any losses or expenses arising from investment decisions made by the reader.
