Having insurance is important, but having the right amount of insurance is what matters most.
Insured: You have an active insurance policy that protects you against specified risks, subject to its terms and conditions.
Underinsured: Your coverage may not be sufficient to meet your financial obligations or protect your dependants if an insured event occurs.
Overinsured: You may have more coverage than your needs justify or can comfortably afford. However, having multiple policies does not automatically mean you are overinsured.
How can you determine your insurance needs?
- Assess your income, debts, family responsibilities and financial goals.
- Calculate the financial protection your family may need.
- Consider existing insurance, savings and other available resources.
- Review your policies regularly, especially after major life changes.
- Consult a licensed insurance professional to assess whether your coverage is appropriate.
Key message
Don’t just ask, “Am I insured?” Ask, “Do I have the right protection for my needs?”
The goal is to balance adequate financial protection with affordable premiums, ensuring that your insurance supports rather than strains your financial plan.
References
Financial literacy reminder: Review your coverage before increasing, reducing or cancelling any policy. Individual needs and policy terms vary
