A premium increase can leave some people narrowing their eyes in suspicion, or with an array of questions when they are told that it is an age related premium increase.
If you are wondering what this means or how do insurers determine your premiums here is what you need to know.
What is an age related premium increase?
Life insurers use the underwriting process to help them determine a premium that will be suitable for you. While you might feel young at heart, your body will age, making you susceptible to the risk of falling ill or injuring yourself. Age-related premiums are put in place to keep up with your needs as you age. Therefore, it’s better to take out a life insurance cover while you are still young or as soon as possible otherwise you may pay a higher premium if you take out a life policy when you are older.
How will the premium increase work?
A common mistake that some people make is to take out life cover and then forgetting about it. Before you put your signature on the dotted line, it is vital to check if you will be able to afford the premium increases that come with it.
At MiWayLife, we will increase your premiums by 5% every five years to ensure that your needs, along with the needs of your loved ones are adequately covered. Your premiums will not increase for the first five years.
For example, if you take out a policy while you are 25 years old, you will pay the same premium until you are 30 years old. From there, your premiums will increase by 5% on the anniversary date if your policy.
Will it still increase despite me being healthy?
As the famous saying goes, "Your health is your wealth." It plays a vital role not only when you are applying for a life insurance cover, but also when it comes to the quality of life that you have. Your health matters when taking out a policy, especially when you undergo the underwriting process.
Your premium will be reviewed to see if you are still getting value for money and if it will cover your needs. Any changes to your premium during this time will not be determined by individual circumstances such as your health at the time.
Increasing your cover your amount?
Should you increase your cover amount, this will also increase your premiums. Therefore, weighing your reasons for increasing the cover amount along with checking the premiums that come with it can help you make an informed decision. If you are still not sure you can speak to your insurer to know how this will affect you and what options are available to you.