Pay a little more in the beginning and save thousands over your life time.
If you know you will be holding on to your insurance for a long time then Level premiums, whilst more expensive at the start, may be cheaper over the long term.
Compare Stepped Vs Level premiums with ease
At Find Insurance, we have made it easy for you to compare and acquire insurance cover with some of the largest and most established companies in Australia.
In Australia, there is a real issue with people being under insured. We have found that a lot of Australians who had held Stepped premium insurance cover were more likely, compared to those holding Level premium insurance cover, to reduce or cancel their personal insurances after the age of 55. The main reason being that premiums started to become unaffordable after the age of 55 whereas if they had been paying Level premiums over the same period they may have held on to the insurances for a longer period of time.We believe all financial advisers who provide personal insurance advice should adequately explain to all their clients, who wish to acquire personal insurance cover, what the difference is between Stepped versus Level premiums.We believe it is important that all clients, when requesting a quote, should receive a comparison table outlining the initial Stepped vs Level premium costs and the cumulative cost of holding insurances over a period of time. This enables the client to make an informed decision about the 1st years premiums cost and the cost over a specified period e.g., 20 years. Often, level premiums over a long period of time are a lot cheaper compared to stepped premiums when you add the premiums up over that period of time.
What is the real cost of holding Insurances?
The cost of personal insurance is different for each individual. This is because the cost is calculated based on several factors: occupation, age, sex and the area you live in.To help you understand the difference and potential savings you might achieve if you were to choose Level premiums compared to Stepped premiums, we have supplied some examples on the right for you.
The top table represents an Osteopath and the bottom table represents an Electrician. The tables display how much it would cost each of them to acquire $1,000,000 of Life cover and $500,000 of TPD cover as of 1st July 2021, (all other factors being equal).Each table displays the 1st year premiums as the cumulative premiums each year. Both tables show that if the Osteopath and Electrician were to hold on to their insurances for more than 14 years they would be better off being on Level premiums compared to Stepped premiums.These figures are indicative only and provided as an example for future discussion. They are accurate as of 1st July 2021 and should not be relied upon today. You will be provided with up-to-date figures in your Insurance Reports.
