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Tackling Increasing Insurance Premiums

We had a fantastic response to our article Why do my insurance premiums increase? As a follow up we would like to explore a few options that may help you with managing the cost of your insurance.

Linking to the CPI
Did you know that most life insurance companies offer you the option of linking your cover to the Consumer Price Index (CPI)? This means that, for each year that the rate of inflation increases (indicated by the CPI), your amount of cover will increase at the same rate – which means your premiums will also increase.

Most insurance companies will allow you to refuse annual CPI linked increases, or you can select this option at the time of taking out your cover.

Levelling your cover
Life insurance is more affordable when you are younger and healthier. As time goes by and you get older, the risk for the insurance company to insure your life is higher so in turn, the premiums you pay increase.

Although more expensive in your early years, you may wish to consider levelling your cover in order to keep premiums affordable when you are older. Level policies will cost you more initially, but the total cost over the life of the policy is considerably less. The younger you are when you take out a life insurance policy, the lower the premium will be for the life of the policy - and the more you'll save.

Changing your smoking status
As a general rule, a smoker will always pay higher insurance premiums than a non-smoker. If you were a smoker at the time you took out your policy and then stopped smoking for at least 12 months, most insurers will allow you to change your status to non-smoker - reducing your insurance premiums.

Make sure your cover is relevant to your needs
We find that as our clients' lives change, their insurance needs also change. By discussing your cover with your adviser on an annual basis, you can make sure that you are not paying for anything you may not need – or sometimes you may find that there is an improved product for a better price.