You're in control, here's some things you can consider
We all know that life insurance can make a world of difference at a time when you and your family need it most. But insurance premiums are an expense, and if you’re looking for a way to save money you may sometimes wonder if you’re better off without it.
If you feel like the premium you’re currently paying is higher than you can afford, there are ways you could reduce your premium costs while keeping your insurance.
This may give you time to recover from a financial setback and get your budget back under control.
Before making any changes, you should check your policy carefully and speak with your financial adviser. If you decide to add some cover benefits back after they have been removed, this may require underwriting and could increase your premiums higher than they were previously.
How your premiums are calculated
There are a wide range of factors that affect how much you pay in premiums. These include:
- Age
- Gender
- Smoker status
- Medical history
- Occupation
- Payment frequency
- General health
- Benefit amount
- Extras
While you can’t change some of these factors, such as your age, it’s worth looking at whether you could make other changes to your life that may affect how much you’re paying for life insurance. If you’ve already done this, you can ask for your insurance policy to be reassessed.
Ways to reduce your premium costs
As well as examining the factors that are used to calculate your insurance premiums, there are some specific actions you could take to reduce how much you’re paying:
|
Action |
What it means |
What you can do |
| Reduce how much cover you have | As we move through different life stages, the amount of insurance required can change. For example, you have paid off your mortgage, children have finished school, etc you may not need as much cover. | Please speak to your financial adviser regarding your specific cover needs. You can get a quote to find out how much your insurance cover will cost if you reduce it. |
| Removing extras | Your life insurance policy may include additional cost options – like premium waiver – which carry additional costs. Removing an option that you no longer require can help reduce your premiums, but does remove the benefit of the option. | You can ask us to remove any additional options. But remember that if you do cancel these, you will not be able to claim under them and may not be able to add them back in the future if you change your mind. |
| Changing your smoking status | Smoking puts your health at risk – which is why it will impact the amount of your premiums. If you change from a smoker to a non-smoker status, it may reduce your premiums. | If you’re not a smoker, check your policy schedule to ensure your details are correct. If you have stopped smoking for more than 12 months and have no smoking-related illnesses, you can ask to be reassessed. |
| Changing to a less hazardous occupation | Some insurance policies for dangerous jobs include a loading – a percentage increase in the cost of the premium. If you work in a dangerous occupation and you change to a less hazardous one, we may be able to reassess your loadings, subject to underwriting. | If you change to a less hazardous occupation, you can ask us to reassess your premiums. |
| Declining indexation | To make sure your cover keeps up with the cost of living, you may have selected an automatic increase to your amount of cover without you needing to provide medical or other details. This is called an 'inflation adjustment'. Each year we increase your sum insured by either a fixed percentage or the increase to the consumer price index (CPI). We'll apply whichever of these is higher, which means you'll get more cover. As your cover increases so does your premium. | You can ask us to decline the increase in the sum insured from indexation at the policy anniversary. It's a good idea to speak to your financial adviser about how inflation may impact your personal circumstances, so you can decide whether inflation adjustments are right for you. |
Get the protection you need
While you want to make sure your premiums are affordable, it’s also important to feel confident that your loved ones will be looked after financially if you were injured, suffer a trauma, become terminally ill or pass away. Your life insurance can help relieve financial hardship for you and your family during an emotionally challenging time. The value of this cover can be priceless.
That’s why you need the right level of protection for your circumstances – so you can have total peace of mind knowing your family will always be taken care of, no matter what happens. Before you make any changes to your life insurance, it’s best to review your cover carefully with the help of your financial adviser.
Important information
Resolution Life Australasia Limited ABN 84 079 300 379, NZ Company No. 281363, AFSL No. 233671 (Resolution Life) is part of the Resolution Life Group. The content on this website is for information only. The information is of a general nature and does not constitute financial advice or other professional advice. Before taking any action, you should always seek financial advice or other professional advice relevant to your personal circumstances. While care has been taken to supply information on this website that is accurate, no entity or person gives any warranty of reliability or accuracy, or accepts any responsibility arising in any way including from any error or omission.
A disclosure statement is available from your Adviser, on request and free of charge.
