Ways to reduce insurance premiums

Action 

What it means 

What you can do 

Reduce how much cover you have 

Different insurance is required at different stages of life. If you’ve paid off your mortgage and don’t have children at home, you may not require as much coverage.

Speak to your financial adviser regarding your specific cover needs. You can get a quote to find out how much your insurance cover will cost if you reduce it. 

Income protection – increase your waiting period 

A ‘waiting period’ is the time from when you first become unable to work because of illness or injury, and when an income protection benefit starts being paid.

You may have accumulated extra sick or holiday leave that can provide an income buffer if you are unable to work due to illness or injury. By increasing your ‘waiting period’ for example from 30 days to 60 or 90 days (longer waiting periods are available) you may reduce your premium. 

Speak to your financial adviser regarding your specific cover needs. You can get a quote to find out how much your insurance cover will cost if you reduce it. 

Income protection – 
Reduce benefit period 

A benefit period is the length of time your income protection benefit is paid for.

As you get older, or your financial situation changes you may not require the same benefit period you chose when you took out your policy. Reducing your benefit period may make a reduction to your premium. For example: 

• Moving from a lifetime benefit to an aged 65 benefit period. 
• Reducing your benefit period from an aged 65 benefit to a 2 or 5 year benefit period. 

Speak to your financial adviser regarding your specific cover needs. You can get a quote to find out how much your insurance cover will cost if you reduce it. 

Removing optional extras 

Your insurance policy may include extra cost options - like Increasing Claim Option, Accident Option or Trauma Reinstatement. Removing extra cost options that you no longer need can help reduce your premiums, though it does remove the benefit of the respective option. 

You can ask us to remove any extra cost options. But remember that if you do cancel these extras, you will not be able to exercise them and may not be able to add them back in the future if you change your mind. 

Update your smoking status if you've quit smoking

Smoking puts your health at risk – which is why it impacts your insurance premiums. If you change from a smoker to a non-smoker, we may be able to reduce your premiums. 

If you’re not a smoker, check your policy schedule to ensure your details are correct. If you were a smoker when you took out your policy and have since stopped smoking (including using nicotine replacement products) and don’t smoke any other substance, including vaping for more than 12 months and have no illnesses caused or made worse by your smoking habits, you can ask to be reassessed. 

Paying your insurance through super 

Life, total & permanent disable, and income protection insurance can be held inside super. This means the premiums are paid from your super not out of your after tax take-home pay – but keep in mind, using your super to pay for your insurance will reduce your retirement savings.

It’s important to note that a condition of release, under super law must be met before any insurance benefit can be paid to you, so it may be harder to get a payment. For example, if you have income protection in super and are not working at the time you suffer an illness or injury you may not be eligible for an income protection benefit. And if you have life insurance inside super, there may be tax implications for your beneficiaries. 

If you want to start paying for your insurance through your super, you may be able to set up the new policies in super without having to be underwritten again. Speak to your financial adviser about structuring your insurance policies through your super and whether it is suitable for you. 

Changing to a less hazardous occupation 

Dangerous jobs can attract a loading, which is a percentage increase in the cost of the premium. If you worked in a dangerous occupation when you took out your policy and have changed to a less hazardous one, we may be able to reassess your occupation, subject to underwriting. 

If you have changed to a less hazardous occupation, you can ask us to reassess your insurance. This would involve underwriting. 

Declining indexation increases

To protect your benefit against inflation, your benefit amount is automatically increased each year until you reach age 65. Your premium will increase as a result of this increase in cover. 

You may decline the indexation increase for any particular year or for all years and this change will take effect from the next policy anniversary. 

Restructure your insurance from standalone to linked 

If you have life, total & permanent disability and/or trauma insurance, you can choose to hold each of these covers as a standalone plan or link them under the same plan. Standalone plans generally have a higher premium than linked cover. 

If a benefit under a linked option (such as TPD insurance) is paid, that payment reduces the benefit amount of each of the remaining linked covers on the plan (such as life insurance) for that insured person.

For example, you have $1.25 million in life insurance and $250,000 on a linked trauma option. If you made a trauma claim and the full benefit of $250,000 is paid, your life insurance will be reduced to $1 million. 

Alternatively, under a standalone plan, if a benefit is paid it does not affect any other insurances you have. For this reason, standalone plans are more expensive. 

Speak to your financial adviser regarding your specific cover needs. You can get a quote to find out how much your insurance cover will cost if you restructure it. 

Request a reassessment of health loadings 

For certain medical conditions and injuries, a health loading can be applied. A health loading is a percentage increase in the cost of the premium. 

If you had health concerns when you originally purchased your insurance, such as high cholesterol or high blood pressure, and your health has since improved, we may be able to reassess your health loading, subject to underwriting. 

If your health has improved, you can ask us to reassess your insurance. This would involve underwriting.

Request a reassessment of of sporting and/or recreational pastime loadings 

Certain sporting and recreational pastimes, such as football, motor sports and scuba diving are considered risky and may result in a premium loading. If you are no longer participating in these types of pastimes we may be able to remove the loading, subject to underwriting.

If your pastimes have changed, you can ask us to reassess your insurance. This would involve underwriting. 

Pay your premium annually

Most insurance products have a frequency loading if you pay your insurance premiums more frequently than annually. 

You can ask us to change your payment frequency.