Life Insurance premiums don't increase with age
- Willi Olsen
- Updated
What is level life insurance?
Level life insurance premiums don’t increase with age but stay fixed for a long time, usually until age 70 or 80, when the policy changes to a rate for age. Premiums increase if you increase the cover amount or activate indexation.
Fixed premiums mean you can budget the cost of insurance – premiums are affordable also during our 50s and 60s when most people cancel stepped-up or increase policies because of cost.
Fixed premiums mean you have cover when you need it the most.
1. Life insurance premiums don't increase with age - is that for me?
The simple answer for most people is yes.
Level life insurance is becoming increasingly popular in New Zealand, and there are good reasons for that.
Dollar for dollar, level life insurance provides the best value for money.
The cost difference?
Renewable life insurance premiums have no expiration date or maximum term.
However, over the lifetime of the policy, it can cost 3 to 15 times more than the same coverage amount in level life insurance.
Level life insurance is a unilateral life insurance policy.
Meaning that the insurer makes an enforceable promise not to increase the cost of premiums.
This is also sometimes called guaranteed-level life insurance.
Please be aware that some life insurance companies in New Zealand offer look-alike level life insurance without promising or guaranteeing not to increase premiums.
At LifeCovered, we only compare guaranteed-level life insurance.
Anything else is a waste.
a) Comparison: Premiums & Sum Insured are Not Inflation Adjusted
Who could benefit from a non-inflation-adjusted level policy?
Perhaps homeowners with a mortgage or someone who wants a mortgage but doesn’t want the premiums to increase all the time.
Ironically, many banks offer only stepped life insurance.
The graphs speak for itself.
b) Comparison: Premiums & Sum Insured Are Inflation Adjusted
What is noticeable here is that the Stepped Premiums increase much more with inflation – indexation factor activated.
Level Life Insurance increases as well, but not nearly as much.
Comparing premiums, the Sum Insured increase equally in line with the indexation factor.
Sum Insured end results is the same for Stepped or Level.
The only difference is how much you want to pay?
3. Increasing level life insurance
Increasing life insurance is designed to combat inflation.
All the same insurers of guaranteed life insurance offer a variation to the life insurance policy.
It allows the payout to increase over time. Sum insured and the cost of premiums increase with inflation.
For example, if you have children or if your income increases, a greater payout will be required to provide a suitable level of protection for your dependents.
4. Which Insurers offer Guaranteed Level Life Insurance in New Zealand
We compare five insurance providers that offer guaranteed fixed insurance payments.
5. Why consider fixed premiums?
What sets level life insurance apart is that premiums and coverage stay the same for a term.
Most mortgage lenders may want to see that you have life insurance to cover the debt during that term if you have a mortgage.
Additionally, to help pay off debts, cover funeral costs, or support your family if you were to die unexpectedly.
Compare level life insurance quotes
How would you like a life insurance policy that guarantees premiums do not increase for the next 10, 20, or 30 years?
If you don’t smoke and your weight is pretty normal, based on your height and gender, chances are you qualify for preferred rates.
We don’t promote one company or one policy. That’s your choice.
But we represent the top-rated companies with the best life insurance in New Zealand, which are:
- Guarantee premiums do not increase and have the
- Strongest credit rating (ability to pay your claim)
*Prices are an estimate based on a 40-year-old non-smoking male office worker, insuring for 250,000 and premiums are fixed until 80 years of age. Quotes last checked 12 November 2018 and are subject to change.
6. People Also Ask
What if I die before my level policy ends?
If you die during the term, a tax-free death benefit is paid out to the policy owner or beneficiary. If you don’t die during the term, most policies automatically convert to a yearly renewable policy.
When does level life insurance end?
Level life insurance is a life insurance policy that lasts for a specific period of time, ie a term. Once you have a level life insurance policy in place, the policy will only end after the term period has elapsed.
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