Lock in the cost of insurance premiums

Typically insurance premium rates increase annually with age. But what if you could control the cost of insurance by locking in premiums and have the insured amount reduce annually?

If you are finding it difficult to make ends meet, you can budget with confidence by locking in your insurance premiums and have peace of mind by remaining protected.

Essentially, the sum insured is reduced as the premium rates stay the same as you get older.

Case study

Cameron is a 30 year old non-smoker who has $750,000 in Life and TPD insurance that costs him $64.13 per month in stepped premiums.

Times are a little tough for Cameron right now and quite possibly for the next 3 years. He has asked his financial adviser for options regarding his insurance cover. Cancelling his insurance cover was the least preferred option so his financial adviser suggested that he lock in the premiums at their current rate for the next 3 years.

This means that Cameron will know exactly how much he will pay in premiums so he can budget with more confidence, with the peace of mind of staying protected. His financial adviser put these figures together:

Assumption: Policy fee indexation of 5%.

After the 3rd year, if Cameron’s financial situation improves, he has the option to unlock the premium freeze and start again on stepped premiums on $721,750 in Life and TPD insurance. In fact, Cameron can cancel the premium freeze at anytime if he chooses to.

Did you know?

Most insurance companies have an option where you can choose to freeze your insurance premiums.

The above information has been sourced from Norwich Union Life Australia Limited. 

Important Information

The above information provides an overview or summary only and it shouldn’t be considered a comprehensive statement on any matter or relied upon as such. The above information doesn’t take into account your personal objectives, financial situation or needs. It’s important for you to consider these matters before making any financial decision and I recommend you seek help from a financial adviser.