ADVERTORIAL
Life, health, or income insurance premiums are primarily based on three factors: age, health, and occupation.
It’s crucial to secure coverage while you’re still young and healthy. Delaying could lead to higher premiums as you age and potentially develop health conditions.
In addition, you may face exclusions (things not covered) or loadings (higher premiums) based on increased health risks.
Important note: Smoking or vaping can add 50 per cent to your premiums.
When taking out new cover, you’ll typically have two options:
- Rate for age: Premiums start lower but increase each year as you age.
- Level premiums: You lock in a fixed rate, paying the same premium over an agreed term or for the life of the policy.
Which option is more cost-effective?
Let’s look at an example: A 30-year-old male takes out $500,000 of life cover. With rate for age, he’ll start by paying about $7 per week.
If he opts for level premiums until age 65, he’ll pay around $20 per week.
While rate-for-age premiums are initially cheaper, by the time he reaches 65, level premiums will save him over $20,000 in total.
In the long run, level premiums save you money.
There are also ways to maintain good coverage while reducing premiums – let’s chat.
Think about the financial impact on your family if you were unable to work due to an accident, illness, or even premature death. Having a ‘Plan B’ is essential for financial security.