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Making Life Insurance More Relevant to Women

Insurance and the Filing Cabinet

OKay so you bought some insurance, good start.

Even assuming, as a good adviser never would, that the amount is even roughly sufficient, and the product is appropriate, is it going to work for you?

Do you know where your policy is?

In a virtual world, you'd think that a quaint thing like a policy document is no longer necessary. But to spend ages choosing the right policy, and then cheerfully lose the document places you at a distinct disadvantage should you need to claim later - or if someone else should have to claim on your behalf. I am aware of at least two cases where policy wordings were changed by companies after the policy was taken out - and one of them has turned into a nasty disputed claim.

Is your policy owned by the right person or entity?

Especially significant in cases of life insurance, since having it in your own name is definitely not going to be helpful to those that remain. Even owning it jointly with your life partner may not be so smart. Besides, what if they die with you? There was a case like that a few eyars ago near where I live - it does happen. Why not make sure the life insurance contract is owned by the trustees of your family trust?

Who knows where it is?

Well, whoever owns it (say, trustees) should know where it is. So should whoever has a stake (say, family, or business partners), plus whoever might have to help in the event of a claim (say, your broker, accountant, and lawyer). If you do a good job of estate administration you will have a good documents file at home, a copy with your lawyer, and a list of documents - copied to other people that need it.

Also, make sure it isn't heavily camouflaged: in almost every client documents file I have ever seen there are copies of old policy documents that have long-since been cancelled, plus old annual review letters, letters frlom brokers, and goodness knows what other rubbish. Check that the policy in your file is being paid from your bank statement, keep the document, and then only the latest annual review letter.

Do they know what to do in the event of a claim?

At the front of your insurance file keep a schedule of risks, policies, company, policy number, premium, and the number to call to make a claim. The list should cover: house - building, house - contents, car 1, car 2, boat, bach, other, life cover, income protection, trauma, total disablement, medical, travel, and other.

Do you know what will be paid in the event of a claim?

If you aren't an insurance broker, accountant, lawyer, the chances are you've never read your policy document. You pay hundreds of dollars a month, and rely on it for hundreds of thousands - but you've not read it. At best you looked at the schedule and noted some key points matched up with what you discussed with your broker. But you don't really know, so grab a coffee, and take out paper and pen, and looking through your list work out what you would actually get paid. Be definite: "in the event of losing the house completely to a fire I would get..." then list everything. "In the event I was disabled for six months I could claim for...".

Knowing that the answers will be incomplete and may be inadequate, you may well have to start the process of reviewing your insurance all over again. Heck, best to find out now, rather than later.

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