Insurance premiums to expensive?

When purchasing insurance or reviewing your exisiting insurance cover, there are a few factors to keep in mind.

For example, the correct amount of cover is essential in ensuring that your loved ones and survivors will be able to pay off final expenses, mortgage, or other debts that they are in need of the life insurance proceeds for.

Just as important as the right amount of insurance cover is having the right type of insurance protection plan. This is because there are many different kinds of insurance to choose from – and each may work a little differently, as well as provide various different features for the policyholder.

Some options to ponder...

Some of my insurance customers are looking at options as their insurance premiums start to get expensive.

Just to start with there are two premium options when you take out Life Trauma or Income Protection. They are stepped also known as rate for age or level. CPI (Inflation) adjustments aside stepped will increase each year based on age while level premiums remain the same, although start off more expensive than stepped. Typically level premiums are the way to go if you are in your 20's and 30's and can afford them.

There are a couple of options though to maintain stepped premiums when they become increasingly expensive.

  1. Invoke a premium freeze option which mean the premium stays the same however the cover will reduce on an annual basis. This is a good option when you still require cover but where your budget is fixed.
  2. Reduce your cover periodically. You can reduce Life, Trauma and Income Protection cover at any time via a simple request to your insurer. Note the owner of the policy needs to do this. When premiums are becoming out of hand a request to reduce the level of cover can be a simple solution.