You're in control, here's some things you can consider
We all know that life insurance can make a world of difference at a time when you and your family need it most. But insurance premiums are an expense, and if you’re looking for a way to save money you may sometimes wonder if you’re better off without it.
If you feel like the premium you’re currently paying is higher than you can afford, there are ways you could reduce your premium costs while keeping your insurance.
This may give you time to recover from a financial setback and get your budget back under control.
Before making any changes, you should check your policy carefully and speak with your financial adviser. If you decide to add some cover benefits back after they have been removed, this may require underwriting and could increase your premiums higher than they were previously.
How your premiums are calculated
There are a wide range of factors that affect how much you pay in premiums. These include:
- Smoker status
- Medical history
- Payment frequency
- General health
- Benefit amount
While you can’t change some of these factors, such as your age, it’s worth looking at whether you could make other changes to your life that may affect how much you’re paying for life insurance. If you’ve already done this, you can ask for your insurance policy to be reassessed.
Ways to reduce your premium costs
As well as examining the factors that are used to calculate your insurance premiums, there are some specific actions you could take to reduce how much you’re paying:
What it means
What you can do
|Reduce how much cover you have||As we move through different life stages, the amount of insurance required can change. For example, you have paid off your mortgage, children have finished school, etc you may not need as much cover.||Please speak to your financial adviser regarding your specific cover needs. You can get a quote to find out how much your insurance cover will cost if you reduce it.|
|Removing extras||Your life insurance policy may include extra optional features – like premium waiver – which carry additional costs. Removing extras that you no longer require can help reduce your premiums, though it does remove the benefit of the respective option.||You can ask us to remove the optional extras in your cover. But remember that if you do cancel these extras, you will not be able to exercise them.|
|Changing your smoking status||Smoking puts your health at risk – which is why it will impact the amount of your premiums. If you change from a smoker to a non-smoker status, it may reduce your premiums.||If you’re not a smoker, check your policy schedule to ensure your details are correct. If you have stopped smoking for more than 12 months and have no smoking-related illnesses, you can ask to be reassessed.|
|Changing to a less hazardous occupation||Some insurance policies for dangerous jobs include a loading – a percentage increase in the cost of the premium. If you work in a dangerous occupation and you change to a less hazardous one, we may be able to reassess your loadings, subject to underwriting.||If you change to a less hazardous occupation, you can ask us to reassess your premiums.|
|Declining indexation||To protect your benefit against inflation, you may have selected an indexation option that automatically increases your sum insured each year. This occurs each year until you reach the indexation option expiry age, which is normally age 65 or 70. This regular increase to your sum insured also increases your premium.||You can ask us to decline the increase in the sum insured from indexation at the policy anniversary.|
Get the protection you need
While you want to make sure your premiums are affordable, it’s also important to feel confident that your loved ones will be looked after financially if you were injured, suffer a trauma, become terminally ill or pass away. Your life insurance can help relieve financial hardship for you and your family during an emotionally challenging time. The value of this cover can be priceless.
That’s why you need the right level of protection for your circumstances – so you can have total peace of mind knowing your family will always be taken care of, no matter what happens. Before you make any changes to your life insurance, it’s best to review your cover carefully with the help of your financial adviser.
AMP Life Limited ABN 84 079 300 379 (AMP Life) has proudly served customers in Australia and New Zealand since 1849. AMP Limited ABN 49 079 354 519 has sold AMP Life to the Resolution Life group whilst retaining a minority economic interest. AMP Limited (and its related companies) have no day-to-day involvement in the management of AMP Life whose products and services are not affiliated with or guaranteed by AMP Limited. “AMP”, “AMP Life” and any other AMP trademarks are used by AMP Life and Resolution Life under licence from AMP Limited.
The content on this website is for information only. The information is of a general nature and does not constitute financial advice or other professional advice. Before taking any action, you should always seek financial advice or other professional advice relevant to your personal circumstances. While care has been taken to supply information on this website that is accurate, no entity or person gives any warranty of reliability or accuracy, or accepts any responsibility arising in any way including from any error or omission.
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