Life Insurance Premium

 Why Opt for Life Insurance?

Life insurance plans are offered to buyers for a premium that has to be paid every month or year  – life insurance quotes . In return for the money paid to the selected insurer, the buyer gets a set of benefits that he or his family can enjoy when a claim is filed. For instance, when a buyer purchases a term life cover, his beneficiaries will get a lump sum compensation payout in the event of his death.

When a buyer purchases an income cover, he will get monthly payouts from the insurer along with additional benefits when he files a claim with the insurer. When a buyer purchases a trauma insurance plan or total permanent disability insurance plan, the buyer will get a lump sum payment when a successful claim is filed.

The claims eligibility criteria for different types of personal insurance plans vary; however in order to purchase an insurance plan such as a life cover in Australia, the buyer should be a permanent resident of the country.

How Often Do I Have To Pay Premiums?

Depending on the insurance plan you have selected and the insurer’s terms you may have to ether pay the pay the premiums once a month, twice a year or annually. Some insurers allow buyers to pay premiums online by logging into their account where they can manage various features of their policy.

Other insurers may offer other premium payment options such as payment via the phone or in person at the insurer’s office. Most insurers in Australia also allow policy holders to transfer the premium amount from their bank account to the insurer’s account.

If the policy holder is given an option to pay yearly premiums, then the insurer may also offer the option to get a discount on the total yearly premium amount provided the policy holder pays this amount in advance. The policy holder may be offered the option of paying this lump sum amount online or via the phone.

 What is the Cost of Life Insurance Plans?

Buyers who opt for term life plans can expect to pay as less as $10-$15 a month if they purchase basic plans. Buyers who opt for income insurance plans can expect to pay as less as $12 a month if they purchase basic plans. Opting for plans with added benefits, a longer benefit period or a shorter waiting period will result in higher premiums.

People with sports cars, people with sports bikes, people who play rough sports, people who smoke and people with pre-existing health premiums can expect to pay slightly higher premiums since they are considered as high risk buyers. High risk buyers are those people who are most likely to file one or more claims.

If you are a high risk buyer and you want to lower the cost of your policy then you can opt for a policy with exclusions for certain injuries or certain illnesses. You can also opt for a policy with premium loading fees. Other ways to reduce the cost of the policies include purchasing an insurance plan with a longer waiting period and a shorter benefit period along with filing claims with care and filing claims only when needed.

 What are the Types of Premium Payment Plans?

Premium payment plans ensure that buyers can pay the premiums for life insurance plans with ease. These plans are designed to benefit the buyer by burdening his load. These plans allow the buyer to pay the premiums over a period of time rather than paying the full amount in one go right away.

Stepped premiums and levelled premiums are two of the types of premium payment plans offered to Australian buyers who purchase income insurance plans and term life covers. The blended premiums payment plan is also available to some buyers who purchase life insurance plans however; not all the insurers in Australia offer this type of premium payment option.

 What are the Benefits of Premium Payment Plans

  • Stepped premium plans are offered to those buyers who plan to take a short term policy and would like to enjoy low premiums for the first few months or years. Buyers should note that these plans require the policy holder to pay increasing premiums with every instalment; this means that the buyer can enjoy low premium rates at first however; with time the premium rates for these plans increase.
  • Levelled premium plans are offered to those buyers who plan to take a long term policy with a term that can range from 10 years – 20 years. These plans have one main benefit, they allow the buyer to know in advance how much has to be paid every month and they allow the buyer to prepare accordingly. These plans require the buyer to pay a pre-decided and fixed amount whenever a premium payment is due. Buyers who opt for these plans do not have to pay increasing premiums unless stated so by the insurer.
  • Blended premium payment plans offer the benefits of both levelled and stepped premiums without the downsides of both plans.

 Which Premium Payment Plan Should I Opt For?

  • The term of the plan, the premium amount that has to be paid every year, your income and your age will determine which premium plan you should opt for. Older buyers who have to pay high premiums for a long period of time are encouraged to opt for levelled premiums since opting for this plan implies that when the policy holder gets older he is not burdened by increasing premiums.
  • Younger buyers who opt for short term policies are encouraged to opt for stepped premiums if they want to enjoy the option of paying smaller premiums first. It should be noted that stepped premiums are ideal for younger buyers who have just started work, have a new job or have recently got married since these plans allow the policy holder to enjoy low premiums until he has settled down in life and has decided how to manage his finances.


  Income Protection Life Insurance


Related reading about life insurance

Asteron Life Insurance
AXA Life Insurance
MLC Life Insurance
AMP Life Insurance
Allianz Life Insurance