Understanding Life Insurance Premiums
While paying for your protection benefits can seem pretty simple – the regular amount required is deducted from your bank on the due date – the reality is that there are a number of different premium structures on offer and if you are not aware of how your particular premium structure works then there may be some surprises for you in the future.
Lets look at the most common premium structure known as YEARLY RENEWABLE TERM or RATE FOR AGE.
This structure often represents the cheapest premium option in the first year.
The structure allows for annual, age related increases in premium so you pay an increasing price each year in conjunction with the life assured’s increasing age.
The structure also allows the company to pass on any increases or decreases in the underlying rates for age on the next policy anniversary following the rate change. this means that the future premium illustrated to you at the time you purchased your policy were estimated based on the underlying rates that were applicable at that time and are not guaranteed. Future premiums may differ from those illustrated according to the company’s actual experience of claims and persistency.
If you select an annually reviewable premium structure, you should be expecting your premiums to increase each year on the policy anniversary date.
Many people also choose the CPI Increase option to retain the true value of their benefits.
Because the premiums are increasing, the premiums payable for the benefits you have elected to CPI index will also increase by the inflation rate. these CPI increases in benefits and premiums will take effect on every policy anniversary.
There are options and we recommend that all clients also consider a Level premium option to provide certainty in the future.
Contact Thorners to discuss the premium options available to you. We offer a New Zealand wide insurance service and applications can also be made online for Life and Health cover from the link on the Thorner website.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
20% extra Life Insurance for free for a very limited time
For some time Sovereign has been concerned about the level of under insurance within New Zealand. Over the past few years personal debt levels, and therefore the need for adequate cover, have significantly increased but sales of insurance have remained relatively flat. This situation is likely to get worse with the current recession, where affordability not only impacts on people’s ability to purchase insurance, but also causes them to reconsider the need for the cover they already have.
Today Sovereign announced a new initiative to help customers afford appropriate levels of new insurance.
From 21 April, and until 31 July 2009, Sovereign will provide new customers who take out Rate for Age Life Cover an additional 20% of the sum assured free of charge for two years. This is up to a maximum additional amount of $100,000 sum assured per customer, not per policy. For example, if the customer were to set up a TotalCareMax policy with $500,000 Life Cover, they would receive an extra $100,000 sum assured free for two years. At the expiry of the two year period the additional 20% sum assured Life Cover will automatically end.
This special offer is automatically available on all TotalCareMax Personal and Business Life Rate for Age policies (including Voluntary Workplace policies) issued by Sovereign on or after 21 April 2009, until 31 July 2009.
Existing customers who make increases to their Life Cover will also benefit from the offer, but the increased amount will be set up as a separate policy. Replacement business is excluded from the offer.
Use Thorners online application process on the web page or contact us very soon to apply for your new life cover today and benefit from the 20% extra cover while the offer lasts.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
