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21 Sep 2021

Like to keep your premiums down? You may have options

Thinking about the long-term affordability of your insurance? When it comes to protecting your financial future, taking out cover is a good place to start. 

But as you age, and the likelihood of claiming on your insurance increases, so do your insurance premiums. That’s why it’s important to take proactive steps to keep your cover affordable in the long term – so that it’s there to help you when you need it most. 

Unsure where to start? Here are some key things to know.

Why do premiums go up as you age?

While everyone’s situation is unique, in general, premiums tend to increase over time as insurers consider you ‘riskier’ of claiming. Basically, each time you renew your policy, your insurance provider calculates that you’re a year older and so more likely to experience the unexpected.

Plus, your premiums are not only affected by your age, but also by any pre-existing conditions you may have, or any unhealthy habits (like smoking). 

But, there are some steps you can take to keep your premiums down.

Rate for Age vs Level Premiums

One thing key to having an appropriate level of insurance for your future, is by securing long-term affordability – and the type of premiums you choose can help. 

Rate for age (or ‘stepped’) premiums are the most common type of premium in New Zealand: they usually start lower and increase as you get older, because the likelihood of making a claim increases. Stepped premiums can be a good option if you’re looking for short-term affordability and you think that your need for insurance may reduce over time (for example, because you’ll pay down the mortgage).

But rate for age premiums aren’t the only option available. With some insurance types (e.g., life insurance), you may be able to choose level premiums instead. Level premiums usually start significantly higher than rate for age premiums, but they don’t increase with age. If you’re looking for long-term affordability and you think your need for cover won’t change, then level premiums may be the most appropriate solution for you.  

More ways to keep premiums low

Like some other options to help keep your premiums down? You could consider things like extending your wait time before a claim becomes payable, or upping the excess stated in your policy (if you can afford to pay the costs should you claim in the future). 

Plus, you may not need the same level of cover as you get older. Things change over time, you may have paid off your debts or have some investments to count on, in an emergency. Then, you could consider reducing the insured amount, thereby reducing your premiums.

All in all, despite your age or circumstances, there may be some options to keep your premiums affordable over the years. As your advisers, we can help you find out what you can do, while keeping the appropriate level of protection for your financial future.

Like to discuss your options?

When it comes to insurance, affordability is key both in the short and the long run. If you’d like to talk about your options, please don’t hesitate to contact us. We are here to help.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

Link Financial Group Ltd trading as Mortgage Link and Insurance Link FSP 696731 holds a licence issued by the Financial Markets Authority to provide financial advice. Insurance Link (NZ) FSP 446867 is authorised by that licence to provide financial advice. Please visit for more information and Disclosure information.