Policy Audit – Have you done it?

Question – “Other than yourself, who else in your family knows Exactly what you have bought for yourself?”

If the answer is a Yes, congratulations because you have fulfilled another important aspect of financial planning process which is – claims.

Answered No to my question, you could be like one of the thousands who had bought policies but never claim (read more at https://www.lia.org.sg/tools-and-resources/checking-for-unclaimed-proceeds/). The most obvious reason for the unclaimed policies is that the surviving family members did not know it even exist. We can only imagine how many families may have suffered financially because of this oversight.

No one will doubt that purchasing insurance coverage is critical. However, not having a sound Claims Activation System may result in unclaimed policies, making it is as good as not buying and putting your family members under unduly financial stress.

The Solution – A comprehensive Policy Audit

Policy audit involves the following steps

1. Portfolio compilation – you can also call it “portfolio spring cleaning”. Like cleaning and tidying up your house during the new year, you should do the same for your financial portfolio. By making a detailed compilation of your policies allows you to know exactly what coverage you have, the timeline for policy maturities and the total premium you are paying. You may also discover what is lacking from your portfolio once better clarity is obtained.
2. Sharing – once you have done the compilation, the critical part is to let someone know where you keep your policy summary (softcopy is a better choice). This someone should see you often and is most likely to be informed if something were to happen to you. It will be wise to list the contacts of the Financial planners in the summary too.
3. Streamlining – unknown to many, there are components in your policies that may be outdated. New plans may be rolled out throughout the years with lower premium and better coverage. Many a times, the changes are not automatically applied onto your policy. Meaning that you may be paying the higher premium for a lower coverage. Identifying these outdated components may help to reduce your total premium payable. However, this step should be taken with care and advisory from an experienced financial planner is necessary.

Conclusion

Only after you have completed the above steps then you can be assured that your financial plans can work as intended. It will take considerably amount of time to compile the policies correctly if you are not familiar with the jargons as different company may use different terms for the same type of coverage.

Again, I stress that it will be advisable to work with an experienced Financial Planner to achieve accuracy and correctness in the audit. As our reader, we are extending complimentary policy audit to you and your family members. Contact us to make sure that your portfolio works for you.