Insure yourself wisely: Plan your money, plant for your future needs

Insure yourself wisely

Protect yourself and your future

As the number of people that are making use of digital offers to manage their finances is steadily increasing, there is a need to strengthen their digital financial literacy.

Young people in particular start using (digital) financial services from an early age. Many young people can be considered as digitally savvy, as they are comfortable using digital technologies and often have sound digital competences. However, these skills do not automatically imply that they are also digitally financially literate. In fact, overconfidence with digital financial services may lead to poor financial decisions and outcomes.

Insurance Europe supports the Global Money Week, the annual global awareness-raising campaign organised by the Organization for Economic Co-operation and Development (OECD). The campaign highlights the importance of ensuring that young people, from an early age, are financially aware, and are gradually acquiring the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve financial well-being and financial resilience.

The theme of this year’s Global Money Week, “Protect your money, secure your future”, highlights the importance of adopting a responsible and informed approach to personal finances and being aware of potential risks.

Insurance Europe supports the Global Money Week, the annual global awareness-raising campaign organised by the Organization for Economic Co-operation and Development (OECD). The campaign highlights the importance of ensuring that young people, from an early age, are financially aware, and are gradually acquiring the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve financial well-being and financial resilience.

The theme of this year’s Global Money Week, “Protect your money, secure your future”, highlights the importance of adopting a responsible and informed approach to personal finances and being aware of potential risks.

PROTECT YOURSELF AND YOUR FUTURE

To be prepared financially for unforeseen events means making the right financial decisions well in advance of such events. This is why it is so important to really take the time to fully understand the insurance policy you wish to purchase, and this is equally true whether you are buying it through more traditional channels or online.

It is important to ensure that you are buying a policy from a registered insurance provider. That being said, you are no less protected in a digital environment than a physical one be it in terms of the protection of your privacy or of receiving information about the product or service.

Here are five tips to help you get off to a good start so that you are properly covered.

PROTECT YOURSELF AND YOUR FUTURE

To be prepared financially for unforeseen events means making the right financial decisions well in advance of such events. This is why it is so important to really take the time to fully understand the insurance policy you wish to purchase, and this is equally true whether you are buying it through more traditional channels or online.

It is important to ensure that you are buying a policy from a registered insurance provider. That being said, you are no less protected in a digital environment than a physical one be it in terms of the protection of your privacy or of receiving information about the product or service.

Here are five tips to help you get off to a good start so that you are properly covered.

1. NEW DIGITAL SERVICES

Going digital is not only about purchasing your insurance policy online. Insurers offer a range of digital solutions to assist you at every step of the process, such as, when you’re considering taking out insurance cover, or when you need to submit a claim following an unexpected event.

A smartphone app can be an effective way of checking your insurance policies or receiving a reminder of when it is time to review them. Many online offerings of insurance provide you with a virtual assistant or chatbot that can help you to find out more about a particular product or respond to any queries you may have. Your insurer may also allow you to submit a claim digitally, with the added convenience of sharing documentation or photos of any damage or harm via your smartphone.

2. CHOOSING THE RIGHT POLICY FOR YOU

It is worth taking the time to do a little research online to find the insurance policy that best suits your needs. Start by identifying what your requirements are and make sure that you understand what the insurance policy proposal covers, what it excludes and what your rights and responsibilities are. Download any important documents and save them digitally or on paper for future reference.

Digital channels offer a simple way of shopping around and identifying the right policy for your needs at the right price. However, don’t just focus on the price of the policy — make sure that what it covers is right for your needs.

If you are unsure of what type of product you need or if you need help with the process of buying your cover online, you can always seek the help of your insurer or of an insurance intermediary.

3. GETTING THE RIGHT COVER

Even when buying an insurance policy digitally, it is important to provide your insurer with all the information that is relevant to the policy you are buying in order to get the right cover. Make sure that you answer all the questions honestly and to the best of your knowledge. For example, where requested, disclose your full driving history when applying for a motor insurance policy. Of course, your insurer will keep your information strictly confidential and safe.

If you don’t take reasonable care to answer all your insurer’s questions, your policy might be cancelled, or any future claim could be rejected or not fully paid.


4. SMART FEATURES

Through technological innovations insurers can offer you products that are better tailored to your needs, as well as services that are more risk-aware or risk-reduction oriented.

For example, home insurers may use connected “smart home” solutions, such as sensors that detect water leaks and shut off the water supply to prevent flood damage or that schedule appliance maintenance checks based on usage to reduce the chance of harmful events, ultimately reducing claims and lowering premiums.

Likewise, more and more property insurers offer alerts of extreme weather events, like flooding or high winds, that allow policyholders to take protection measures.

And some motor insurers use telematics devices that monitor your driving time or how you drive, which allows the insurer to offer you tailored products, such as “pay-as-you-drive”/”pay-how-you-drive” policies, with the premiums adjusted accordingly. This can help improve road safety, reduce traffic (as people are incentivised to drive less), combat fraud and lead to faster, more efficient assistance with accidents or claims.

5. SAFETY FIRST

Whether logging into an insurance website or using an insurer’s smartphone app, it is important to keep your personal details safe. Make sure that you use strong personal passwords or PINs over a secure network and ensure that your device and anti-virus software are kept up to date. Always use a unique password that is not used for any other websites. Do not share your security credentials with anyone else and remember to log out of online sessions when you are finished.

Also be wary of any unsolicited emails or text messages purporting to be from your insurer that request you to provide your personal details or password. If you are unsure, contact your insurer directly via the telephone number on their website.

Learn more about Insurance Europe's “InsureWisely” financial education campaign here.

Learn more about Insurance Europe's “InsureWisely” financial education campaign here.

WHAT IS A PENSION?

A pension is a way of building up a pot of money to live on in retirement. It is a long-term plan that is designed to help you save throughout your working life.

There are two main types of pension plans that can help you complement your state retirement income:

  • Occupational pensions: pension schemes that are linked to a work contract or an occupational activity
  • Personal pensions: voluntary retirement savings

WHAT KIND OF PENSION PRODUCTS DO INSURERS PROVIDE?

Insurers are major providers of occupational and personal pensions. Besides providing a return throughout the savings period, they can also provide protection for very different life risks, including:

  • Protection for dependants if a saver or beneficiary dies prematurely (mortality risk)
  • Protection if savers are unable to pay contributions due to invalidity (morbidity risk)
  • Protection against a saver outliving their savings (longevity risk).


Insurers can cover risks both in the accumulation (working) phase and — through annuities — in the pay-out (retirement) phase.