Your New Year’s resolutions: good even for your insurance!
Have you made any New Year’s resolutions? You might be surprised to learn that in addition to positively impacting your health, morale or finances, they could also benefit your insurance. Here are some resolutions and their advantageous consequences you may not have thought about!
1) Giving up smoking
Smoking reduces life expectancy. That’s why smokers pay more for their life insurance than non-smokers — as much as double! After 12 months without a cigarette, your insurer will consider you a non-smoker again, and you can ask for your premium to be reduced.
Having a smoker at home can also affect your home insurance premium. Why? Because of the higher risk of a fire. It’s in your interest to tell your insurer that there are no more smokers in your family when the time comes to renew your policy or if you’re shopping for a new one.
2) Reducing your alcohol consumption
Moderate drinking does not affect your life insurance premium. But if you are considered to be an over-user, some insurers may charge an additional premium — this is known as a “rated” policy — or even decline to cover you. Reducing your alcohol consumption could therefore enable you to save money on your life insurance premium.
Drinking less alcohol also has a preventive effect on your car insurance: an arrest for impaired driving is expensive. Your vehicle insurance premium could even triple for the following four to six years. So drinking responsibly is always a wise decision for your safety and that of others — but also for your pocketbook.
What’s more, if you have more than one impaired driving conviction, some vehicle or life insurers may refuse to cover you.
3) Losing weight and being more active
When it comes to life insurance, your state of health greatly impacts your premiums and your insurability. The healthier you are, the better your chances of finding reasonably priced insurance. Any initiative that helps you improve your health, such as losing weight and exercising, can translate into savings on your premium.
Depending on the product and the amount of life insurance coverage you want to purchase, you may be required to answer a medical questionnaire and provide blood samples. The better your results, the better the chances of benefiting from good rates. On the other hand, an insurer can “rate” a person who is overweight, or even refuse coverage if he or she suffers from other health problems.
Will a critical illness diagnosed after you buy your life insurance policy affect your coverage or your premium? No, and there’s no need to mention it to your insurer. But this is why it’s always wise to buy your insurance when you are younger and in good health!
4) Getting organizing
Maybe you’ve thought about starting the new year on the right foot by organizing your personal papers. This is a good time to review all your insurance, and specifically to check that you are neither over- nor under-insured.
Credit card insurance, mortgage life insurance, group insurance, individual life insurance… sometimes many small or large policies meet a same need, such as protecting your family in the event of your death. Ask yourself if a single policy with a higher coverage amount could suffice. Paying one slightly larger premium is often more beneficial that paying many small ones. In particular, check into the advantages of purchasing life insurance instead of mortgage insurance. And what about your beneficiaries? Perhaps it’s time to update them if there have been important changes in your life, such as a separation.
Do you truly understand what your insurance covers? There can, for instance, be several kinds of travel insurance (private, group or credit card). Compare your policies and keep only the one that covers you appropriately and for everything.
If you are retired or self-employed and have no group insurance, look into obtaining health insurance, which provides coverage that complements that provided by Quebec’s public plan.
Check that your car and life insurance policies include all the “riders” — add-on provisions — you need. If necessary, add those that are missing and eliminate those you don’t need.
Take this opportunity to do an inventory of your property. This will come in handy in the event you need to make a claim to your home insurer, for example if you suffer losses in a fire. It will also allow you to determine if you are sufficiently insured.
5) Taking control of your finances
Your credit score influences your car and home insurance premiums. If you pay more attention to your personal finances — for example if you pay your credit card balances on the due dates, you repay your debts regularly—you will improve your credit score and your insurance premiums can drop in the medium term. Why? Because insurers believe that people who take care of their finances also take care of their property and are therefore less likely to make claims. Read our advice to find out more about your credit score and its impact on your insurance premiums.
If it’s time to renew your car and home insurance, shop for your insurance like a pro! Premiums vary significantly from one insurer to another for the same vehicle or home. Another trick for saving? Take advantage of discounts that insurance companies offer for buying more than one product with them. Here are some other ways to save on your vehicle insurance.
Do you take more than one trip a year? Think about annual travel insurance. You’ll save money and will always be covered even if you decide to pack up and leave at the last minute.
Whatever your resolutions for the new year, we hope you attain your goals and have more money in your pocket.