Insurance is one of those have too’s in life.
When it comes to personal insurances: death, disability, etc, there are ways to reduce your costs.
The following tips will help get the right policy at the right price.
Talk to us for advice and a no cost or obligation review today!
Do you need life insurance?
Unlike health insurance, not everyone will need to take out life insurance. If you don’t have dependents who would suffer financially in the event of your death, life insurance can be an expense that you don’t actually need. Even if you do, it may be the case that your family would be able to survive on a combination of savings, superannuation and payouts from other insurance policies and wouldn’t need life insurance. To work out whether this would be the case, work out exactly how much you’ll need to be insured for and include everything that your family would still need to meet the costs of if you were to die – including future expenses that may not yet have come up, such as school fees. If you can cover some (but not all) of this from other sources, your life insurance only needs to cover the deficit rather than the full amount.
Buy When You’re Young.
Because life insurance companies consider selling a policy to an elderly person a guaranteed loss, they offer a remarkable discount to those that purchase young. The math is really simple: the younger you are when you buy your policy, the more favorable your policy and its premiums.
Buy When You’re Healthy.
Continuing with the simple math, if you lead a healthy lifestyle with relatively healthy practices, you’ll be considered less of a risk to life insurance companies and will therefore reap the discounts. Inversely, individuals that are obese or that smoke regularly are labeled as a liability to insurance companies and will therefore pay higher rates.
Have you already got it?
If you’re in a super fund, you may already have some form of life insurance. This may not be extensive enough to fully cover your needs though so if you’ve decided that you need life insurance, you may well have to top this up quite significantly. Quite often these covers are a – ‘no questions asked insurance’.
Beware of ‘no questions asked’ life insurance.
Be wary of policies which don’t ask about your medical history before they approve your application. These kinds of policies can be useful for those with chronic health problems who may not otherwise be approved for life insurance due to being high risk but this often makes them much more expensive than the average life insurance policy.
It’s certainly possible to pay less for life insurance without opting for a bargain basement policy that won’t offer adequate coverage. Seeking a life insurance comparison can help you find the most affordable rates, without much hassle. Don’t get sucked into thinking that cheaper is better – where life insurance is concerned, this is almost always not the case as it won’t provide enough cover. Instead, focus on arranging superior cover without paying over the odds.
How to save money?
1) Lead a healthy lifestyle
Leading a healthy lifestyle will protect you from getting lifestyle diseases such as obesity, high blood pressure and certain forms or cancer. These diseases will significantly increase your premiums and thus make the overall cost of life insurance expensive.
2) Buy only what you need
While you do not want your loved ones to be in financial strain when you die, it does not make sense to buy more than what you need. This will only strain you in terms of monthly payments. Keep in mind that the higher the amount you are purchasing, the higher you will pay.
You can purchase a ‘continuation add on’ in your policy. This means if you do suffer an event and claim the small amount of cover for what you need now. You can rebuy insurance after the claim for later in life when you may need more cover.
3) Make adjustments as needed
Do not continue paying the same rates after 10 years. With time, your priorities will change and other factors will come into place that can enable you to reduce your payment. For example, if your kids have already gone through school, you may not need a larger life insurance for their education. Adjust your payments.
4) Find out the payment terms
Most life insurance Australia companies allow payments to be made monthly, quarterly, semi-annually or annually. Get a schedule that will not be strenuous on your budget. While paying monthly can be more affordable, keep in mind that it may be more expensive in the long run than paying a lump sum semi-annually or annually.
5) Buy Death and total permanent disability (any occupation only) via superannuation.
This may be cheaper but can save you tax along with reduce the cost from your monthly budget.
Life insurance in Australia does not have to be out of reach. The above are some of the ways through which you can save.