In terms of the cost of your life insurance premiums, there are a variety of factors that your insurer will take into account when assessing your policy application. Take a look at some of the areas that can influence the cost of your insurance premiums.
It becomes gradually more expensive to be insured for funeral costs as you get older, given the increased likelihood of making a claim on your policy. Depending on the type of premium you choose to pay and the age you are when you first take out your policy, you could end up paying more for your funeral insurance than a younger person.
Type of premium
The type of premium you choose to pay will have a substantial impact on your overall insurance spend. For example, if you’re only wanting to take out short-term life insurance in your younger years, then stepped premiums are more likely to be the cheaper option for you, whereas long-term policyholders may find level premiums more attractive to save money in later years.
Funerals will vary in cost depending on where you live in Australia. This in turn impacts the cost of your premiums. For example, New South Wales has the highest cost of living, and is generally the most expensive state when it comes to purchasing a cemetery plot.
As with other types of insurance, the cost of premiums correlates directly to the amount you’re looking to be insured for. For example, $15,000 cover will attract higher premiums than cover for $5,000. If you’re looking to avoid higher premiums, start by reassessing the sum that you’re insured for, and decide whether your family will really require a substantial amount for a funeral you'd be content with.
Optional extras can be a meaningful way of extending your policy’s coverage, but they’ll come at an extra cost. Accidental death or injury cover is one such example, which can usually be purchased as an optional extra on your policy if it isn’t a standard inclusion.
Premiums for smokers are generally significantly higher than those for non-smokers due to the increased risk of illness and death. If you’re looking to take out a funeral insurance plan at a cheaper premium rate, one of the first things you should do is quit smoking. This can save you upwards of 50% on your life insurance premiums.
The Australian economy ultimately plays a fairly significant role in determining the cost of insurance premiums. As inflation occurs over time, the cost of premiums will rise, even if they’re being paid on a level-premium basis.