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How You Can Pay Less on Your Life Insurance Premium

How You Can Pay Less on Your Life Insurance Premium

Your life can be full of ups and downs, but life insurance can help you and your family through it all. However, you need to make sure your life insurance premiums are cost-effective, especially considering the current cost of living crisis Australians are experiencing. How can you do this?

Determining the main cost contributors to your insurance policy can help you search for competitive rates and coverage.

Metlife’s Value of Life Insurance Report found “The number of Australians purchasing life insurance has dropped since 2018 from 56% to 47%. According to an industry survey, 48% of respondents cited the perceived high cost of life insurance as the main reason for not having cover.”1

Here, your trusted financial advisers in Newcastle share some tips and tricks on how you can pay less on your life insurance premium while still ensuring your family is protected in the event of a tragedy:

Pay Yearly to Get a Discount

Some insurance companies will provide you with a better value if you pay yearly. Paying annually when an insurance company offers a discount instead of paying in full can help you save up to approximately 5% on your life insurance premium. Plus, when you pay yearly, you’re less likely to forget to pay, and you’ll be getting a discount.

Address Common Risk Factors

Knowing and addressing common risk factors can help you get lower life insurance premium prices.

Here are some common risk factors to be aware of that can affect your premiums:

  • Smoking
  • Obesity
  • High-Risk Hobbies
  • Medical History

Having more than one risk factor can sometimes bump up your premiums by a lot. You can mitigate these risks by addressing them. For instance, you can quit smoking, lower your BMI by losing some weight if you are above normal BMI, lower your blood pressure and cholesterol, and try to maintain a healthy lifestyle. Not only is it good for your insurance premium, but it’s also good for you too!

Pay via Superannuation

If cash flow constraints are stopping you from being adequately insured, speak to your financial adviser about holding some or all of your life insurance inside of superannuation and paying your life insurance premiums from your superannuation balance.

Currently, you can own Life Insurance, TPD Insurance and Income Protection via super, however, Trauma Insurance must be owned personally.

You need to be aware that owing insurance via superannuation can place some limitations on your policy’s benefits and features, so be sure you weigh up the pros and cons.

Choose Your Premium Structure Wisely

Another option is to consider ‘stepped’ over ‘level’ premiums.

Stepped premiums may be cheaper when the policy is issued but increase as you age. It pays to do the sums and consider what the total cost of the premiums will be over five years or so. This may be a good option for new business owners or others who don’t have a lot of disposable income but expect to earn more over time.

Level premiums are not affected by your age but are generally more expensive than stepped premiums in the beginning. If you want to control your costs over time and intend to hold the insurance for a long period, level premiums may be less expensive in the long term. Nevertheless, the premiums may be affected by inflation or be adjusted by the insurer.

You may also be able to have a combination of stepped and level life insurance premiums based on your circumstances and policy structure. For example, you may want level premiums for income protection and trauma cover if you intend to have them for the long term, and stepped premiums for life cover and TPD. The important thing is to review your premium structures regularly with your adviser.

Review Your Policies

As with any products you hold, it is important to review your insurance policies regularly. The insurance market is vast, offering an overwhelming amount of policies and benefits. It is best to conduct a review of your policies with an experienced financial adviser who specialises in insurance and can help you determine whether you can get a better deal for your insurance needs now.

Life Insurance Premiums Tailored to Your Needs

As you can see, there are several ways you can get lower life insurance premiums However, it’s worth considering that as important as a low premium may be, the coverage offered is the most important consideration you need to make. Speak to the expert financial advisers at Newcastle Financial Planning Group who can provide you with more information on this topic.

Newcastle Financial Planning Group offers financial planning services in Newcastle, Lake Macquarie and the Hunter. Whether you’re looking for advice on insurance, investment, or your retirement, our experts can help you. Call our office or book online to secure your complimentary first meeting!



  1. http://chrome-extension//efaidnbmnnnibpcajpcglclefindmkaj/https://www.metlife.com.au/content/dam/metlifecom/au/thoughtleadership/All/Value-of-Life-Insurance-Report_20210622.pdf


DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.
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