The Best Kept Insurance Secret: Level Premium
Despite being the smart choice, Level Premium Insurance is still being overlooked by the vast majority of New Zealanders.
The most common type of insurance premium structure is known as stepped. As the name suggests, insurance premiums step up yearly based on age and claim statistics. At first glance, the stepped premium option appears to be the most cost-effective option. Unfortunately, as you age, your premiums will ramp up significantly in price. Over time, this type of policy often becomes too expensive to maintain, with many New Zealanders cancelling their insurance due to affordability.
Is Level Premium right for you?
Level premium Insurance does not suit everyone’s financial situation, but if you think you’ll require some form of debt or lifestyle insurance after the age of forty, we urge you to explore your Level Premium options.
We usually advise most of our clients to take out a combination of Level Premium and Stepped Premium insurance. As debt decreases, dependents get older, and the client moves into a better financial position, we periodically review and reduce the Stepped Premium insurance until they’re left with just Level Premium, which provides affordable protection through to retirement age.
Level Premium Insurance is a long term commitment between you and the insurer. Therefore, to minimise any issues at claim time, we advise for you to acquire a copy of your medical notes to submit with your application to your insurer. This eliminates medical non-disclosure issues and will ensure you’re paid out promptly in the event of a claim.
Before you sign up with an insurer, have your adviser do some proper research on insurer financial strength, product quality, and of course, premium pricing.
This article contains general information and does not take into account your individual requirements. Before making any changes to your insurance portfolio, please seek advice from a professional insurance adviser.