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23 Jun 2021

How to be ‘cover-aware’

How well do you know your cover? When it comes to personal insurance – whether life, health, or any other – it can be tempting to get it and forget it. To put it in the ‘sorted’ pile and move on. But, like all tools in your financial life, it’s important to have a sound understanding of what you have, and how it can be used. 

Here are some key ways to be ‘cover-aware’. 


What you’re covered for

Might you have missed out on a claim? Sometimes, not knowing the extent of your cover can lead to you missing out on a payout that you were eligible for. It helps to really know the details of your insurance policy, to better understand what you can claim on and get some financial support for.

This is where the value of a regular insurance review lies. A review is important because you can check if you’re appropriately insured for your needs (current and changing) and avoid missing out on a payout.



Put simply, an excess is the amount that you contribute to a claim. For example, your insurance policy has an excess of $500, and the insured event costs $500 or less, then you’ll have to pay the full amount out of your pocket. If the event costs more than $500, for example $1600, you’ll be paying the excess ($500) and the insurer will cover the remainder ($1,100).

It is key to know the excess specified in your policy, as your payout will only cover anything above that amount. Plus, increasing the excess is one of the ways to reduce your premiums: if you can afford to pay a little more upfront in case of claim, then adjusting the excess can save you money in the meantime.


Exclusions and loadings

When you apply for insurance, the insurer will ask about any medical issues you may have or have had in the past. Then, they will then use this information to tailor your cover to your situation and may apply certain ‘exclusions’ and/or ‘loadings’ to your policy. 

It’s important to note that, in some cases, a loading or exclusion can be reviewed later on. In a nutshell:

  • Exclusions – These are anything that your insurance won’t cover, depending on your circumstances at the time of application (like your medical history, your job, and any risky hobbies that you may have). While most exclusions are permanent, some can be temporary and may be reviewable, for example because your circumstances have changed (e.g., you’ve given up on a risky hobby that was originally excluded).
  • Loadings – In some cases, the insurer may choose to cover a specific condition or habit, and charge a little extra on your policy. Again, some loadings can be reviewed. For example, if you quit smoking for good, after 12 months you can ask the insurer to remove the premium loading, which can potentially save you a lot of money. 

Like to know more? Please don’t hesitate to contact us.


Wait period

A waiting period is the specified amount of time that you will have to wait before some or all of your claim is paid. With income protection, for example, you can choose the wait periods in your cover according to your needs and budget.

Knowing the wait period is important, because the longer the wait, the more savings you’ll need to cover expenses before the claim becomes payable. At the same time, the longer the waiting period you choose, the lower the premiums will be.


Claims mindset

Did you know that, on average, the insurance industry pays out over 1.4 billion claims every year

When it comes to making the most of your insurance, it’s a good idea to have a proactive approach. If you’re not sure whether or not you can claim – please don’t hesitate to ask. Asking questions can sometimes be the difference between a successful claim and one that you might have missed. As insurance advisers, we’re in your corner at all times. 


Time to get familiar with your cover?

Insurance policies can be a long read, but taking the time to familiarise yourself with their details is time well spent. Like to review your cover? We’re here to help. 



The problem of underinsurance – FSC

Spotlight on Insurance – September 2020



Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

Link Financial Group Ltd trading as Mortgage Link and Insurance Link FSP 696731 holds a licence issued by the Financial Markets Authority to provide financial advice. Insurance Link (NZ) FSP 446867 is authorised by that licence to provide financial advice. Please visit for more information and Disclosure information.