Do life insurance premiums increase as you get older?
This will depend on the type of policy and your age when you buy your insurance cover.
Insurance premiums can be either 'stepped' or 'level'. Stepped premiums do increase as time goes on, as the risk of you needing to make a claim becomes greater. This means that most of the cost of your insurance will be paid towards the end of the policy's life and will give you time to save money to cover these higher costs.
If you expect your earnings to grow over time then stepped premiums could be a good option, since you will end up paying more once your income is higher. If you end up needing to make a claim early in the life of your policy then your insurance will have been very cost-effective.
On some policies you can choose to pay 'level' premiums. This is usually only worthwhile if you take out insurance at a young age. If you choose this option your insurance company will generally assume that you will hold the policy until age 65, and will calculate your premiums by spreading the cost evenly over the number of years until you reach that age.
Level premiums mean that you will be paying a larger share of the cost in the first years of the policy, but that you will not have to worry about finding money for expensive premiums later, when you may want to change your lifestyle or cut down your working hours.
It really only makes sense to choose level premiums if you expect to hold your cover for a long time. On a shorter term policy, for example one intended to protect you for the remaining ten years of your mortgage, it probably won't be worth the extra up-front expense.
1300 Life Insurance advisers are able to assist you in determining the best type of policy for you.
Contact a 1300 Life Insurance Advisor Today
1300 Life insurance have access to the full range of Life Insurance available from all Australian life insurance companies. Our advisors use sophisticated analysis to evaluate the features and benefits of each product against your own needs. Our duty of care is to always act in your best interest. We will:
- Assess your needs
- Make an unbiased recommendation
- Provide you with a written statement of advice
- Ensure your cover is properly implemented
If your interested in Life Insurance, please complete an enquiry form and our advisers can get in touch with you. Alternatively you can also phone 1300 543 346 during business hours.