Why life insurance premiums increase?

Life Insurance Premiums Increase every year.

That is what most NZs are used to.

Very rarely will a Bank or Insurance company clearly show you the lifetime costs you can expect to pay for a Life Insurance policy.

Why do life insurance premium increase with age

About 80% of life insurance policies sold in NZ are not designed for the long term because life insurance premiums increase yearly.

At your annual renewal, the Bank or Insurance company calculates that you are older now (it’s what happens with age) and, therefore, at a higher risk of something unforeseen happening to you.

Therefore, Life Insurance Premiums Increase.

“Rate for Age” insurance payment go up every year.

The problem is that the increases become exponential as you get closer to 40 and 50 and beyond.

You’re at a higher risk.
And banks and insurance companies don’t consider that they have been loyal clients for many years.
Instead, Life Insurance Premiums Increase every year.

Many people cancel because of skyrocketing premiums.

What can you do about it?

You can lock in fixed premiums, that don’t increase with age for 30 or 40 years.

Premiums that don’t increase with age is unknown to most New Zealanders.

There’s a couple of reasons for that.

First, most frontline workers at the main banks wouldn’t know anything about them, nor do many of the banks have any of these options available.

Second, they are not as profitable for the banks and insurers.

Advisers and retailers are rarely rewarded the same for providing these fixed premiums to clients.

In general, someone with a fixed premium cover will keep their insurance in place for a much longer time, than someone with a ‘stepped’ – ‘increasing’ premium cover, because the fixed one, is so much more affordable.

See the graph showing the difference.

Level rates will normally save you tens of thousands over the lifetime of the policy.

Furthermore, you will know what the cover will cost you over the long term.

LifeCovered is a New Zealand-based insurance advisory firm founded in 2017. We specialise in life, health, and disability insurance and offer financial advice for business owners and established professionals. Our clients include medical specialists, legal professionals, skilled tradespeople, and IT experts who rely on their income and want to protect what matters most.

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The Fine Print…

Yep, here comes the legal bit. LifeCovered operates this website, which is designed to provide general information and education about insurance and financial protection. LifeCovered, established in 2017, is a registered Financial Advice Provider (FSP675171) and a trading name of LifeCovered Limited, authorised and regulated by the Financial Markets Authority (FMA).

We offer personalised financial advice tailored to your needs in areas such as life, trauma, mortgage protection, income protection, health insurance, and KiwiSaver.

How we’re paid

When you take out a policy through LifeCovered, the insurance company pays us a commission — not you. That means our advice and service come at no extra cost to you. You’ll pay the same premium whether you go directly to the insurer or through us.

The difference? With LifeCovered, you get honest advice, tailored recommendations, and ongoing support — all at no extra cost. We compare the market to find the best fit for your needs, and because we’re not tied to any one insurer, our advice is always focused on what works best for you. No sales targets, no hidden agendas — just smart, straightforward guidance.

When you work with LifeCovered, you receive advice specific to your situation — but only when that advice is given during a consultation.

While the information on this website is regularly updated, it may not apply to your unique circumstances. Any insurance premium quotes shown are indicative only and not binding. The insurer will confirm final pricing and terms after underwriting.

Please remember that the general content on this site is not personal advice. Only a direct conversation with one of our advisers qualifies as financial advice tailored to your needs. Before making any important financial, legal, or insurance decisions, we recommend consulting with a qualified adviser, accountant, or legal professional.