“My consultant has been asking me to purchase all my insurance requirements from one company. Is that a good approach? Can I get better rates? I don’t think I'm getting any better treatment now. I've already got a life and endowment scheme with the same company. I'm not satisfied. Please advise.”
 
It is good that your consultant has raised the subject of insurance, as unfortunately all too often this area of advice is skipped over or completely ignored. Without a full understanding of your financial situation, it is very difficult for me to comment on the suitability of the advice that you have received and whether the product is the most appropriate for your needs.
 
However, I usually recommend to clients that they take out separate policies for each issue that we identify. This is for a number of reasons, but generally you will have different requirements for each type of product, so my recommendations would be made to meet those needs.

It is possible that by combining products, you can end up with a contract that is more expensive than if the elements were separate. This is especially true when protection and savings products are combined. Unless there is a specific reason for it, I believe it is better to separate these two elements of financial planning.

As there are many companies offering a variety of products, some will inevitably be more competitive than others, and so it could well be that a number of providers could be used for the various areas of advice. It is always worth checking that the policies you have remain competitive. Rates constantly change and there may be better deals available.

Another advantage of separate policies is that if you were unable to meet your monthly commitments, with a separate savings and life policy, you could simply take a holiday from your savings plan but continue to contribute to your life assurance. That way, if anything happened to you, you would still be protected.

Meeting your requirements
Going back a few stages, it is worth a brief look at what types of protection are available and the generic reasons for the cover. When you meet with your financial consultant, there are a number of areas that can be reviewed and the suitability of the products will depend on your own personal circumstances.

I have mentioned this in previous articles, but I believe it is worth refreshing again, given the question asked this month. There are three main questions relating to financial planning that cover every aspect of your financial situation. These questions are:

• What would happen if I died too soon?
• What would happen if I lived too long?
• What would happen if I got sick in the meanwhile?
 
These questions may seem rather blunt and direct, but they get to the basics of what I am trying to achieve with my clients. Let’s look at these in more detail and relate them to the question. First, what would happen if you died too soon? For example, what would be the financial implications if you were to die today? Are you married and/or do you have any children? How would they cope without the financial backing that you bring?

The question mentioned life insurance, but to carry out a full review, I would need to establish how much cover you already have. Is this enough? Is it for the right length of time? Does it cover the right people? Is the policy written in such a way so that the proceeds go to the right person at the right time? All these, and indeed many other points, would need to be considered.

Second, what would happen if you lived too long? This may seem like a strange question, as not many would say that they are planning to live for too long. What is meant by this question is related to planning for your retirement. Most people will want to stop work at some point, but you will still need funds to live. These will now need to come from savings rather than from earnings.

Finally, what would happen if you got sick? This relates to the other areas of protection, such as medical insurance, critical illness cover and income protection cover. This is sometimes referred to as financial death – that is to say, you are still alive but have suffered an illness that needs treatment and may stop you working as you recover. These policies will cover the medical bills and give you an income while you get better.

In summary, this is a vital part of your financial wellbeing and should be reviewed regularly to make sure you have the appropriate cover. The product you have been recommended may well meet your requirements, but it is worth reviewing all options before committing.