New Zealanders are living longer, but is their quality of life keeping pace? Average life expectancy for both men and women is now stretching into the 80s, increasing yearly, and is expected to reach an average of 85 by just 2038.
However, while most of us celebrate the idea of a long life, increasing life expectancies creates a few potential issues:
- Lack of appropriate framework for retirement and late-life care that accounts for an additional 5 or 10 years of life.
- Lack of financial planning to account for increasing and prolonged stepped insurance premiums.
Thankfully, this is where Level Life Cover and the experts at AdviceFirst can help – providing the necessary cover you need to stay secure in retirement, but without the increasing drain on your savings.
How does Level Life Cover work?
With Level Life Cover, you don’t have to worry about your insurance premium increasing yearly. While incremental increases are still possible at any stage throughout your policy lifetime, your premiums will not increase each year with age.
It can be a great option if:
- You don’t have insurance or have an existing insurance policy and you’re worried it will become more expensive in retirement.
- You want peace of mind that you’ll still have appropriate cover in place should an unfortunate event occur as you get older.
- You don’t want to stress about how much your insurance will cost as you get older.
And guess what? As life expectancy increases, it’ll likely even save you money in the long run because you’re not paying more as you get older like with other types of insurance.
Who Needs Level Life Cover?
Ensuring financial security and peace of mind is a priority at every stage of your adult life, but it becomes especially crucial as you approach retirement age. Let’s explore a few situations where you might benefit from this type of coverage:
- Self-employed: If you have fluctuating income streams or irregular earnings, you may find level premiums beneficial, as they provide a level of certainty in insurance costs without being tied to variations in income.
- Starting a Family: For families with young children or dependents, level premiums offer consistency in budgeting and ensure that adequate protection is maintained over the long term.
- Long-Term Financial Planning: If you have long-term financial goals, such as saving for your kids’ education expenses or building a retirement nest egg, you could benefit from the predictability of level premiums.
- Approaching Retirement: As you near retirement, having a fixed-rate insurance premium can provide reassurance and stability as you plan for your financial future.
These are just a few examples of when you might consider Level Life Cover, but there are still many other unique situations where you may benefit from the stability and predictability of level life insurance premiums. The best way to ensure you have the right cover in place for your situation is to speak to your adviser and request a policy review.
Reviewing Your Insurance Policy
By regularly assessing your life insurance policy and adjusting it as needed, you can ensure that it continues to provide the protection and peace of mind you need while optimising financial resources to create a comfortable retirement.
We often advise that you review your insurance policy as you experience major life events, such as:
- Marriage, divorce, birth, or adoption of a child.
- Purchase of a new home or significant change in assets.
- Increase in income or assets.
- Retirement planning milestones, such as nearing retirement age or achieving specific savings goals.
If you’re overdue a policy review, speak to your AdviceFirst adviser to conduct a thorough assessment of your existing insurance coverage and identify potential areas of redundancy or over-insurance.
Your adviser will evaluate your current insurance needs based on your financial situation and personal circumstances, then create or revise your insurance policy to align with your current needs and financial goals.
Would you benefit from Level Life Cover?
Fixed Level premiums provide a fixed-rate alternative to the stepped premiums commonly associated with insurance policies.
Secure your retirement and protect your tomorrow, today. If you’d like to know more about adjusting your existing insurance policy to level premiums, speak to an AdviceFirst Financial Adviser to discuss tailoring an insurance policy to meet your specific needs.
Disclaimer: This blog is for informational purposes only and does not constitute individual financial advice.
