Personal insurances such as Life, Income and Trauma cover are some of the most important safety nets when you and your family are going through tough times. Nevertheless, during times of high inflation and increases in costs of living, it can be tempting to wonder if you can do without insurance cover so that you can spend the money budgeted for the cost of premiums elsewhere.
Our advisers can help you find ways to save money on your premiums without having to deal with the stress and uncertainty of losing that vital cover. Here are some of the things they will work through with you when looking at reducing the costs of your premiums.
Reducing your premium costs
Premiums are calculated based on a range of factors, including age, gender, whether or not you smoke, your medical history, and your job. The frequency of your payments is taken into account, as is the benefit amount, and any extras. Some of these factors aren’t something you can change, but if you make any changes to your lifestyle you can ask for your insurance to be reassessed.
1. The first potential place to look is simply reducing the amount of cover that you have. Different stages in life can require different levels of cover, and if, for example, you’ve paid off your mortgage or your children have finished school, you may not need the same cover anymore. With a little research, and by speaking to your adviser, you can get a quote to see how much your premiums might be after these reductions.
2. Removing extra, optional features from your insurance policy is another option. Features such as premium waivers can carry additional costs, although it’s important to keep in mind that the benefit also vanishes if you remove the extra, so be sure you don’t need it.
3. Your health status is also an important factor when it comes to premium calculations, so any significant changes can lead to a reduction. If you’re a smoker, quitting the habit and staying as a non-smoker for at least 12 months (provided you have no smoking-related illnesses) means you can be reassessed. Your workplace can also have an effect, as insurance policies for dangerous jobs sometimes include a loading—a percentage increase in premium cost. If you have changed to a less dangerous occupation you may find this changes the cost of your premiums.
4. Finally, consider whether your insurance policy has an indexation option to increase your insured amount each year and protect against inflation. As you might expect, this regular increase in your policy will also increase premiums. You can ask for that increase to be declined at your policy anniversary.
Stay protected and keep to your budget
It can be tricky to maintain the balance between protecting you or your family’s budget now, and making sure you have the right level of protection in place. If you’re injured, suffer trauma, fall ill, or pass away, your life insurance policy can relieve a lot of the potential financial hardships, which is why it’s important to make sure you stay covered.
Our AdviceFirst advisers can help you work through any potential options for saving on premiums with your personal insurance, while ensuring you have the right cover for your current situation.
To speak with an adviser, call 0800 438 238 or email letstalk@advicefirst.co.nz.
