Here is a way that I recently got some cash back by ringing my insurance company (who provide me with car insurance and home and contents insurance) – it took a mere 5 minutes but resulted in nearly $700 in cash back into my pocket.

A quick intro to what excess means

Excess is the term given to the amount you will need to pay in order to initiate a claim with your insurance company. For example you might be insured for $10,000 of home and contents, though you will need to pay an excess of between $100 – $1500 in order to make a claim.

You can increase your excess

Something many people don’t often realise is that by having an increased excess amount, e.g. paying more in the event of a claim, you can reduce your yearly premium substantially and in turn the amount you have to pay in a lump sum to your insurance company.

It means that in the event of a claim, you will have a higher initial figure to pay in order to claim. This can work in both a positive and negative way.

You can change your excess, mid policy if you want

If you are like me and 6 months into a 12 month policy (on home and contents insurance + car insurance) you can ring your insurance company and request to change your excess. You can reduce your excess and owe them more money or you can increase your excess in exchange for a refund towards part of your policy – it really depends on your personal appetite for risk.

I increased my excess & here’s why

I didn’t really consider my excess when initially signing up, instead just hunting the best deal possible for full insurance that covered my requirements. Now that I need to save some more money, I have opted to increase my excess in order to receive a small refund.

Although this means I will have to pay more should a claim arise, to date I have had zero claims since ever buying my first car or home insurance policy. This doesn’t mean I won’t require a claim into the future, though the upfront savings from a year or two of taking the risk are personally worth it for me. Especially if it means pocketing $700 a car for taking on the risk of having a $700 higher excess – the savings in the first year alone will cover it.

Not a bad way for me to take on a slightly higher risk in return for freeing up some extra cash. The extra money I intend to invest in ways that should make me more money – making money that was otherwise idle until a claim, start to work harder for my wealth creation desires.

Your thoughts

Drop us a comment below with your thoughts. This saving money idea is definitely not for everyone, though curious on what people think about reducing insurance to save more money.

This guide provides the ins, outs, where to look and what to look for when thinking about purchasing life insurance in Australia. 

What Is Life Insurance?

A policy holder pays a premium (monthly, quarterly, annually) to an insurer. In return, the insurer will pay out a sum of money to a nominated beneficiary should the policy holder die within the term of insurance.

Why Do We Need Life Insurance

Life insurance is usually about peace of mind. People tend to take out life insurance once they have dependents, often when they get married or have their first child. If you are an income provider for your family, they will probably be unable to maintain their standard of living should you die. Likewise, if there’s a mortgage to cover, your partner might find it difficult to continue repayments if you’re not insured.

Some life insurance policies are paid out when you are diagnosed with a terminal illness, which can assist with medical costs. Other times, it’s a provision for the cost of the funeral. It’s providing for those you love, should the worst happen.

Types Of Life Insurance

The category ‘life insurance’ covers a wide range of insurance options. Life insurance is insurance should the policy holder die, and coverage can range from covering the costs of the funeral through to covering the costs of debts, the funeral and providing ongoing financial support for your family. You can either purchase ‘whole life’ which covers you up to 99 years and can be expensive, or ‘term’ which covers you for a specific time period (usually 5 to 15 years)and may be renewed.

When purchasing life insurance, you can also look at including insurance should you be permanently unable to work, or are diagnosed with a critical illness.

Life Insurance In Action

The first step when thinking about life insurance is to work out how much you need to be insured for. Things to consider include your income, your debts, the costs of providing education for older children or childcare for younger children. Cannster have a simple downloadable calculator to help you estimate the sum you will need to be covered for.

Then consider what combination of the above forms of life insurance you would be looking for. You will be asked your occupation and annual income. You will also be asked about your gender, age, smoking and drinking habits, and some questions about your medical history. All of this will determine how much you are insured for, and what premiums you will pay.

You have a duty of disclosure, and not disclosing a medical condition when applying for life insurance can mean your insurer has no obligation to pay the claim.

Quotes And How To Get Them

It’s not hard to get a life insurance quote, a quick google will reveal how many options and companies are on offer. Check out iSelect or You Compare both of whom will get a consultant to call you once you’ve filled out some preliminary information online.

I also used Infochoice for some quick online suggestions. It’s not conclusive, but a good place to start when checking out your options. Insurance companies also have consultants who can take you through the policies, if you’re considering going through your bank or superannuation fund.

A new player that also exists includes Choosi who look to compare all forms of insurance on a single website.

Life Insurance Comparison Tips

Once you’ve decided how much cover you need, and narrowed down your field of insurance providers, looks through their product disclosure statements. This should provide everything you need to know about the product, the attendant fees, the benefits and any limitations. It’s not just about cost; it’s about choosing the company that’s going to provide properly for your family. The need to compare life insurance cannot be overlooked and is the single most important way to save money.

Check the product is inflation-indexed, and what restrictions there are for age, dangerous work, casual work and maternity leave. If there’s something you don’t understand, ask the provider. If they can’t explain it, look elsewhere.

This is not an area where the cheapest is necessarily the best; you want a reliable and sustainable provider so ensure you’ve checked the company history and researched their long-term viability.

Life Insurance Companies

Life insurance is a competitive marketplace, so there are a lot of options. Some of the big Australian providers registered with the Australian Prudential Regulatory Association include; AIA Australia, Allianz, AMP, BT, ClearView, Colonial, HCF, Macquarie, MLC, OnePath, St George, Westpac and Zurich Australia.

How To Save Money On Life Insurance

The first step in reducing your premiums is to get healthy. Quit smoking, cut down on your drinking, start exercising. Not only will your premiums be lower in general, you’ll also be less likely to get significant lifestyle diseases that will increase insurance costs. It’s also important to only cover what is necessary. This is preparation for an emergency, you don’t want to sacrifice your current quality of life covering more than is realistic.

It’s also important to continue to make adjustments to your policy- in both directions. If your family gets bigger, maybe think about increasing your protection. But if your kids leave home and you pay off your mortgage, maybe you can look at lowering your costs.

Common Questions About Life Insurance

Q: What Is ‘No Questions Asked’ Insurance?

A: Simply, an insurance policy that asks few questions about your medical history and doesn’t require a medical evaluation or information from your local doctor. While an appealing idea for oder people or people with chronic diseases, these policies are generally much more expensive as they insure people with higher risk.

Q: What factors are likely to increase my premium?

A: Gender, with men being assessed as a higher risk than women, can result in a higher premium. Smoking, being overweight or having some diseases- sometimes even conditions such as sleep apnea- can result in a higher premium.

Q: Will I need a medical exam?

A: With most providers, it’s unlikely you’ll need a medical exam if you’re under 45, unless you’re being insured for over $2.5 million. From 45 years onwards, you will probably be required to have a medical evaluation.

The moment I figured I might need to do more than slap on a band aid was when a paramedic looked at my eyebrow and said:

“Can we get someone to look at this kid with the massive laceration on his head?”

Coming from a person who I assumed spent most of his time dealing with car wrecks, bullet wounds and heart attacks, the term ‘massive laceration’ didn’t inspire confidence.

This was a couple of years ago, when I’d found myself at the University of Kentucky Hospital because I’d decided that, as an Aussie, I should show the uni rugby team how it was done.

One super clumsy head clash later, I found myself sitting at hospital reception with seven fresh stitches holding my eyebrow together, telling the registrar that (thankfully) my travel insurance would cover my stitches. When I got a hospital bill for almost three thousand dollars in the mail, I realised how lucky I was that my uni had made me buy insurance.

Insurance is really about your tolerance for risk, and as your average, twenty-year-old, good-for-nuthin’ punk kid, fully convinced of my own invincibility, I had a stupidly high tolerance. But this experience absolutely turned me around when it came to recognising the value of insurance, specifically travel insurance.

After months of international phone calls and time spent grappling with a healthcare system that ran on the edge of chaos, the whole ordeal was still a huge pain in the…eyebrow. But by the end of it I’d taken the time to learn quite a bit about travel insurance. Here are the important bits I picked up:

Shop on features first, then price.

Research what you’ll need for where you’re going. If you’re going to the USA, for example, where healthcare is expensive, take out a policy with unlimited medical cover. Likewise if you’re travelling somewhere with a poor healthcare system, make sure you’re fully covered for repatriation to Australia.

Likewise make sure that you’re covered for any ‘extra’ activities you mightn’t otherwise be insured for, like skiing or driving.

If you’re planning on taking any particularly valuable items, it’s worth individually insuring them through the policy. Often, the luggage and personal effects coverage in travel insurance will have a limit on single items.

Read the product disclosure statement (PDS)

While fine print isn’t very exciting, it’s important to understand exactly what you’re covered for before you find yourself in an emergency.

Once you’re fully aware of all the features you need, shop away.

Purchasing online can save you a bundle

Especially in commissions if you’re satisfied with the policy on offer.

If you’re a regular traveller, an annual policy could be the most cost-effective option.

So in the end, I was saved from a whopping hospital bill by the foresight of the system (no way, right?), and I was pleasantly surprised to discover I had a much greater level of cover in the US than I did here in Australia. If, in the course of my trip, Alan Joyce had my flights cancelled and my bags misplaced, the secret service had my legs broken, and I’d defamed the Kardashian family, I probably would have been covered for all of it. Now that’s peace of mind.

Before we begin, it must be noted that Australia is often listed as one of the world’s most under-insured countries. We see private health insurance as somewhat of an expense instead of a necessity; though by the end of this guide, we aim to show you why health insurance is vital and why only a fool would not be covered.

Private health insurance

Well, as Australians we are very lucky to have a health system in place from the Government that subsidises and helps us with our medical costs. The Government funds our medical requirements by both funding public hospitals as well as subsidising pharmaceuticals to ensure no Australian is completely out of reach for life saving support or medicine. Just look to the US to see how bad it can get when there are no Government processes in place to help the nation.

However, this Government help only goes so far which is why people end up purchasing private health insurance – to fill the gap of what their medical requirements may be and to in turn protect themselves from any unexpected costs that can amount from treatment.

How private health insurance can save you

The cost of care is not cheap. For anyone who has ever had the misfortune of travelling in an ambulance will tell you that after the joyous ride, you are slugged with nearly $500 for the journey – and that’s just the beginning!

Now imagine something worse happened – you require serious surgery from a specialist surgeon. The costs for surgery can be up to $1Million dollars – how on earth would you pay for that?

Private health insurance can contain a variety of benefits – though generally most have hospital & general treatment. This means you are covered for hospital accommodation (expensive) and your medical services are covered in full (depending on your insurance). This means a monthly premium of $100 or so could actually save you upwards of $1Million dollars should something go wrong.

Those without private health insurance often find themselves in dire straits should something bad happen. Often people have to sell their house to cover expensive treatments which is the last thing you need when the worst happens.

Health insurance comparison

With any luck you will now see the cost benefit of having private health insurance. It is not so much a monthly expense burden as a much needed method of hedging your risks when it comes to health.

So armed with this – it is now time to compare health insurance using online health insurance comparison services.

There are many aggregators that help you best compare your options – though you must note that these websites earn a commission for referring your business to the health insurers – this means there is potential for misleading product pushes that benefit them more than it does you.

Some of the comparison websites include:

• iSelect – www.iselect.com.au, market leading and where I bought my health insurance from.
• You Compare – www.youcompare.com.au, always seem to find these guys – haven’t used yet.
• Help Me Choose – www.helpmechoose.com.au, recently bought by Mortgage Choice.
• Money Time – www.moneytime.com.au, new kid on the block. Great looking site.

How to get cheap health insurance

Firstly, consider your age. The older you get the more cover you need, though no one is immune to bad luck health wise. If you fall into the student category, ring around and compare options specifically for students.

The trick to health insurance is to acquire it when you are ideally younger or healthier. This means you are covered into the future without been subjected to any tests or concerns. It is much harder to apply when you are older with an insurer than it is to do so in your 30’s.

Another trick is to always ensure you tell the 100% truth. No point misleading the insurance company about your current health only to have the insurance revoked come incident time.

From there, insure that you ring around a minimum of five health insurance companies for a quote. It will take you around an hour but can help ensure you get the maximum value for your money. Shopping around for the best health insurance quote can save you hundreds – focus on the big players first and see how you go.

Tips on getting cheap health insurance

Request that your policy be tailored specifically to your needs. Find our what extra are included and try to remove the items you know are unnecessary.  Look to see if you need hospital cover or extras cover or a hybrid of the two.

Ask about restricted benefits. E.g. for certain illnesses – if you claim, you can opt to pay more should there ever be an issue at the time. This means you aren’t paying a premium for a future or potential illness until you need it. This saves you in the mean time and the savings can be used to better prepare for the future.

Ask if you can pay upfront for 12 months. Often health insurance costs will rise year on year. Paying upfront can lock in your rates.

Tax savings on private health insurance

The Government offers a 30%-40% saving on your private health insurance via a rebate or discount.

The Government will discount your premium according to age.

• Under 65 = 30% rebate, this means $30 from every $100 you get back.
• 65 – 69 = 35% rebate, this means $35 from every $100 you get back.
• 70 & over = 40% rebate, this means $40 from every $100 you get back

You can elect how you receive the rebate – it can be reduced off your actual premium, deposited into your account or claim it back with your tax return.

Further to this rebate, having private health insurance means you are not liable for the medicare levy on your tax return. A solid savings on its own.

Some of the main health insurance players

• HCF
• Nib
• GMF Health
• Australian Unity
• AHM Health Insurance
• Medibank
• HBF
• HBA
• MBF
• Frank (GMHBA)

For more information, we suggest you visit the Australian Private Health Government website.

Keep Up To Date

A friend of mine lost her house last week in the wind damage in Katoomba. She has a couple of young kids, and the Department of Housing put her up for a week until her insurance could come through and put her up in a rental property. For the intervening week, she hassled her case manager at the insurance agency about finding a new place and was left with no replies, promises of calling back with news that were never fulfilled and, most crucially, nowhere to move with her family. To add insult to injury, when the insurance company came out to assess the damage, the assessor told her she was only covered for the house, not contents. Only because she knew she was up to date on both home and contents insurance, and had the documents to prove it, could she convince him that it was necessary she be assessed for both. You might want to believe that your insurance company is going to do right by you but, at the end of the day, they are a company. With profit margins and a bottom line. Your welfare is not always going to be at the top of the list, so preparing for the worst is essential. Stick to your repayments, and make sure you review your insurance plan once a year at least. In that instance, you’ll be sure to be across the issue should you be in need of insurance.

Documentation

We live in a mostly virtual society, with a couple of essential exceptions. Insurance is one of them, especially in the instance of someone passing away. MSN Money cites that at least ten states in America are investigating whether insurers are failing to pay out beneficiaries when a person dies. The key is to have all the essential documents easy to hand and in a place where your family knows where it is. As I’ve said, not all insurance agencies are trying to stiff you but you need to prepare should you come a cropper.

Get Help

Find people who can help you deal with your insurance agency. At the end of the day, you paid the premiums, you have a right to be reimbursed for what you were insured for. Get statements from people who were involved- the cops if they came to see your house, or the hospital if it’s a medical insurance issue. Be persistent and keep at them. Companies often function off the assumption that people will eventually give in and won’t have time to fight it, don’t let them succeed with you.

?

Insurance makes me mad. It’s like superannuation. I see all this money disappearing into this seemingly endless pit, from whence it’ll never return. From where I stand right now, there really isn’t much to insure anyway. Should I be hit by a bus tomorrow, the best I would leave behind is an excellent CD collection (if you like Conor Oberst and Bob Evans) and a slightly banged up guitar. I know you can’t put a price on that kind of joy.

I like to think that the dominating thought going around should my life come to an unnatural and untimely end would be grief (right guys, right? You’d miss me when I’m gone?). I’m sure you all like to think the same. One way to ensure people can concentrate on their grief and talking about how wonderful you were is life insurance. Instead of panicking about how your nearest and dearest will possibly make ends meet with you gone, life insurance leaves them free to throw one hell of a wake.

Here’s why you need to get that life of yours covered.

Because things get tough if you don’t

The people you leave behind will need to cope with your outstanding costs. Things are going to be hard enough without having financial strife to deal with. Things like mortgages or your kid’s education should be provided for in the event of your death.

Life insurance is your security that things will be okay for your loved ones even after you’re gone.

Because now is the time

If you get life insurance when you’re young, fit and healthy, your premium will be considerably lower than getting it when you’re older or less than staggeringly fit and healthy. Your premiums will stay considerably lower throughout your life because you were insured while still young and dashing.

Because you should give peace a chance

Your peace of mind genuinely is like a Mastercard ad: priceless. As much as you might resent the premium, you’ll sleep better at night knowing that everything can be taken care of.

How much is enough?

According to this article, your life insurance should be between five and ten times your annual income. The best idea in this instance is to discuss your options with a financial planner, who will be able to recommend a good insurer as well as how much insurance you should get.

Compare, contrast

Do your research and find out who offers the best rates. Talk to your friends and a financial planner about who they’re using. Make sure you review your life insurance periodically, and if you get a massive raise, ensure that your policy reflects that.

It must be the Irish side that makes me maudlin, but I like to be realistic enough to prepare for all eventualities.

I would also like to ensure, as much as possible, that I am remembered fondly after my death. Life insurance might just be the thing to make that happen.

What do you regard as the most important positives of life insurance?

Travel insurance has covered us when we left out cameras on a bus somewhere in Laos, or when our apartment was burgled during our summer holidays. I don’t even like to think how many times insurance has covered my fairly erratic (and often damaging) parking.

So what are the pros and cons of insurance?

The cynic in me thinks that insurance has to be one of the best advertising campaigns ever run. We pay hundreds of dollars to stem a cost that may never eventuate. Life insurance that is never required, a house that is never stolen from. We put our money into private health insurance, and relieve the government of its responsibility to provide free and quality healthcare (which we pay for anyway with our taxes).

We’re being ripped off both ways, and yet we pay it because of the Great What If. What if I got sick, and needed emergency healthcare? What if I were to die, who would provide for my family? What if I pranged yet another car, and needed thousands of dollars to pay for the damages?

The Great What If sits on our shoulders and weighs up the risk. Yes, insurance is, in a lot of ways, a scam. But that one time in a million that you need it, you breathe a sigh of relief that you paid all that money over the years. So how best to negotiate the insurance nightmare; pitfalls, positives and all?

Research

Don’t choose an insurance agency at random; research their policies before you decide. If it looks to good to be true, then perhaps it is. Read the fine print. Don’t choose an insurance company that provides travel insurance, without health costs or that doesn’t cover stolen goods. If you are going skiing, choose a policy that covers you should you hurt yourself skiing.

Insure what needs insuring

For instance, with homeowner’s insurance, make sure you’ve covered the real cost of the house should it need to be replaced. People fall asleep with cigarettes in their mouths, freak storms occur- get insurance that will help you out when the unthinkable happens.

Get your claims in pronto

If you are insured and something happens, don’t delay in notifying the insurance agency. The quicker you can get onto them, the better. Resist the temptation to embellish the story; the easiest story to stick to is the one that actually happened.

The Insurance for Dummies website details the kind of insurance you might need over a lifetime. On top of the usual kinds of life, auto, homeowner and travel insurance, they suggest thinking about disability and long-term care insurance.

The key to insurance is to research companies and policies so that you are covered without paying too much. It’s a balance easier said than done.

How do you ensure you are paying the right amount for insurance?

Any savings tips?

International travel insurance is for Australian’s who wish to have competitive and direct cover from AAMI when they travel overseas, AAMI of which will help you cut out the middle man thus saving you money.

AAMI Insurance conducted some user feedback research about how people felt about travel insurance, which led them to find a common response, that many people felt ‘ripped off’ and unsure of how to purchase travel insurance.

Now we say hello to..

AAMI International Travel Insurance

So what are the benefits of travel insurance with AAMI?

1. It will cover illness when away.
2. It will cover stolen bags or property.
3. It will cover personal injury and resulting claims.

Big deal you say? Well just remember that sometimes medication and treatment in other countries can cost a lot of money, as they do not have a government support system like Australia does.

Also – if you are like me, I once arrived in Spain on a holiday, to find my bag had been stolen by a baggage handler and within it was my camera, jewellery, flight details and my holiday money. Lucky for me I had travel insurance and I not only got all items back, but I also go the costs of the inconvenience it incurred back. That insurance cost me nearly $400 for 2 weeks, a lot more than what AAMI International Insurance is quoting.

Save Money by getting a quote

You can check out AAMI international travel insurance by clicking HERE.

So how does it help you save money by going with AAMI? Easy. You are dealing directly with the insurance provider, thus eliminating the middle man or commission advisor.

AAMI on making claims

Making a claim on your AAMI International Travel Insurance policy is easy. There are no claim forms to fill out unless you have a medical claim. We provide 24-hour emergency medical and travel assistance for AAMI International Travel Insurance policyholders. If you’re overseas, you can contact us on +61 2 8987 1674 (we accept reverse charges).

Where else offers cheap travel insurance?

Let us know where you get good travel insurance from, and ideally where you are going for that price?

This method of car insurance has been popular for years in the UK, and has finally landed on our Australian shores!

Save Money on Car Insurance

With Pay As You Drive, if you drive less, you pay less. Up to 60% less than traditional comprehensive car insurance is what is currently advertised!

PAYD is for people who:

• Drive less that the average person in your neighbourhood
• Use public transport instead of commuting with your car
• Work close to your home
• Have a second car that you don’t drive often or far

The catch of PAYD

You’re thinking, “it sounds too good to be true”. Pay As You Drive makes sense from a commercial perspective. All car insurance should have evolved to this model by now.Most of the bad things you are insured for can only happen when you are driving your car, like crashing into another car for example. If you don’t drive, those things cannot happen.

So the more a person drives, the more an insurance company must charge for that policy in order to pay claims. When you buy an “Traditional” car insurance product, people who don’t drive a lot, subsidise the people who do drive a lot. With PAYD you pay for the kilometres you plan to drive. That means good drivers who drive less than others in their neighbourhood no longer have to subsidise the people who drive a lot.

Has anyone used PAYD insurance in Australia?

Would love to know what experiences people have had with pay as you drive insurance in Australia.

A few months previous to that was Christmas time, and I decided to go to Byron Bay for a 1 week holiday. What am I getting at besides bragging about holidays you may ask? Well, both times I took out Travel Insurance just in case something went wrong. Today I intend to share with you how I saved money on travel insurance by shopping around the different travel insurance providers and why Travel Insurance pays off.

Why take out Travel Insurance?

• Things can go wrong when you are overseas easily.
• Bags can be stolen.
• Covers any kind of sickness.
• Covers your plane getting hijacked (yes its true! you make $150,000 if your plane is hijacked).
• Gives you protection if you lose your passports.
• Reimburses you for travel disruptions.
• Covers accidental death.
• Covers total and permanent disability.

Will you ever use Travel Insurance?

I took out Travel Insurance when I went to Byron Bay – everyone laughed, until on the last night we were staying there we got robbed. My wallet, cards, drivers license, bank cards and more were stolen.

I did the usual and called the police and my bank to inform them of what had happened, followed by a small call to my Travel Insurance provider.

The end result was that for my $110 worth of Travel Insurance for my one week holiday – I got back the following after my wallet was stolen;

• The costs of my license and my partners license (which was in the wallet) = $150
• The cost of my wallet. = $200 Leather wallet.
• Cost of missing my plane back home (while waiting at police station) = $200

So what that breaks down to is this, I payed $150 and claimed for $550.

Had I not have had Travel Insurance I would have been out of pocket $400.

Where do I get Cheap Travel Insurance?

After calling my bank (St.George Bank and Commonwealth Bank) to ask if they gave discounts on Travel Insurance – I learnt that they both broker insurance through the same provider, NRMA. I have not liked NRMA for many reasons for many years so decided some research was in order to find a better cheap travel insurance provider.

I then found the holy grail of Cheap Travel Insurance!

A small website (at the time, its now grown into a very big broker site) that goes by the name of Travel Insurance Direct.

This website did not offer comparisons between providers, it flat out provided the cheapest rates I have ever seen in Travel Insurance history! Have a look at what they offer you and you will quickly realise how much cover you get for such little money.

Question for you:

1. Do you buy Travel Insurance?
2. Do you buy any insurance at all?
3. Do you see it as wasted money?