Affordability of life insurance premiums

If your premiums come out of your account monthly, annual payments might be a more affordable option.

Some things to consider:

• How this affects your budgeting. Could you afford to pay a lump sum insurance premium, once a year?
• Or is spreading out the cost with monthly payments more manageable?
• Would paying a lower premium once a year be better for you?

Making the change to annual payments could save you up to 8.3% on your premiums*.

When you first took out your policy, factors such as your general health or smoker status may have influenced your premiums and led to loadings being added, resulting in higher premiums.

Some things to consider:

• If your health has improved since you started your policy and your policy includes a medical loading, you can ask us to review it. For this to happen, you'd need to apply and go through our underwriting process, so we can assess if you’re eligible for reduction or removal of any loadings.
• Have you stopped smoking since your policy was issued? If it's been a year or more since you last smoked, let us know as it may reduce your premiums.

Let us know if your smoking status has changed.

Working in high-risk jobs, like working with heavy machinery or on a construction site, can mean paying more for Total and Permanent Disablement (TPD) and Income Protection (IP) insurance. But what if things have changed?

Something to consider:

Have you switched to a job that's less risky, maybe moving from a hands-on role to an office-based one? This could lower your premiums.

You’ll need to fill out an application and complete our underwriting process so we can assess whether your change of occupation is eligible for lower premiums*.

Your cover amount, or benefit amount, plays a key role in determining your premiums. Depending on your individual circumstances, if you find that your current level of cover is no longer necessary, you may want to consider reducing it to lower your premiums.

Some things to consider:

• Have there been significant changes in your life since you initially took out your policy? For instance, if you no longer have expenses like school fees or you’ve substantially paid down a mortgage, your financial needs may be less.
• Keep in mind that if you decide to increase your benefit amount again in the future, it will require an application which will be subject to underwriting and our approval.
• It's advisable to carefully think about whether this adjustment meets your individual needs.

For example, decreasing your benefit amount by 10% could potentially lead to a reduction in your premiums by a similar amount*.

Each year, your benefit amount may go up slightly to keep pace with inflation, which is determined by the Consumer Price Index (CPI). This is designed to ensure your benefit stays relevant over time. But remember, as your benefit amount increases to account for inflation, your premiums will increase as well.

Some things to consider:

• The rise in your benefit amount with inflation depends on the Consumer Price Index, so the associated premium increase may be slight or substantial.
• Consider what benefit amount you need and make sure your cover aligns with that. 

For example, if you decide against a 7% increase to your sum insured as a result of inflation, this could reduce your premiums by a similar amount.*

You may be able to adjust your Income Protection to make it more affordable by doing one or more of the following:

Shorten your benefit period

Your benefit period is the duration you’ll receive payments if you’re unable to work due to injury or illness.

Some things to consider:

• If you reduce your benefit period and later decide to increase it again, it will be subject to underwriting and eligibility requirements or may not be available^.
• It’s worth weighing up carefully whether reducing the maximum duration you’ll receive benefits is right for you.
• If you change your benefit period from to age 65 to 5 years, your premiums could go down by up to 44%*.

Any reduction in premium will depend on a range of factors including the product you hold and when you began your cover. The figure above is based on premium rates as at [1 February 2024].

Waiting period is the length of time you will have to be unable to work before you become eligible to claim on your Income Protection policy. Generally, the shorter the waiting period, the higher your premium will be.

Some things to consider:

• If you decide to increase the waiting period, and later want to reverse the change, you’ll need to go through the underwriting process and be approved again.
• Consider how this fits with your personal situation and whether a longer waiting period is appropriate for you.

Changing the waiting period from 30 to 90 days could see up to a 35% reduction in premiums*. 

Any reduction in premium will depend on a range of factors including the product you hold and when you began your cover. The figure above is based on premium rates as at [1 February 2024].

In Agreed Value policies, your benefit amount is fixed when you start your policy. On the other hand, with Indemnity cover, the benefit is calculated based on your income at the time you make a claim, and these policies often have lower premiums.

Some things to consider:

• Once you switch from Agreed Value to Indemnity cover, the change is permanent. You will not be able to take up Agreed Value cover again.
• Consider whether your income might change from year to year, and whether this change will suit your specific needs.

Changing from Agreed Value to Indemnity may potentially lower your premiums by up to 34%*.

Total and Permanent Disablement insurance (TPD) typically includes:

• an 'Any Occupation TPD' definition, which generally means you can make a claim if you’re totally and permanently disabled and unable to work in any occupation you are suited to by your education, experience and training (refer to your product terms for more information); or
• an 'Own Occupation TPD' definition, which generally means you can make a claim if you’re totally and permanently disabled and unable to work in the occupation you had when you became disabled, and usually has higher premium rates (refer to your product terms for more information).
  

Some things to consider:

• Once you switch from 'Own Occupation' to 'Any Occupation,' you might not have the option to revert to 'Own Occupation' coverage in the future. If this option is available, you will need to make an application which will be subject to underwriting and acceptance.
• Consider your situation carefully to determine whether it’s important for you to be able to claim if you’re unable to perform your own occupation.

Switching from 'Own Occupation' to 'Any Occupation' cover could potentially lower your premiums by up to 28%*.

*Any reduction in premium will depend on a range of factors including the product you hold and when you began your cover. Based on premium rates as at 1 August 2023.