How much will my premiums increase each year?
Like most Life Insurance sold in Australia, Premium Life Direct is a stepped premium product. This means the premiums will increase each year with your age.
The annual premium increases because the risk of you needing to make a claim grows greater with age. It might increase up to about 2% per year if you’re under 30, but as you approach middle-age, the increase in your premium will rise to a greater percentage of about 5-7% or higher.
In addition, your premium will increase each year to guard your cover against inflation. This helps ensure your level of cover remains relevant to your needs. You do have the option to stop the indexation of your cover if you prefer, in which case any rise in your premium will only be due to your increasing age.
Here is a quick guide as to the two main factors that affect the cost of your cover over time, and how you can manage your costs.