The cost of life insurance

The cost of life insurance varies based on things like your age, lifestyle, medical history and how much cover you take out. This makes it hard to come up with a price guide without knowing who the policy is for but there are still things you can look out for to keep your premiums under control.

Since the price of every policy can be so different, it’s good to make sure you understand the benefits of each policy, how your premiums get calculated, and what exactly you’re paying for. That’ll help you compare apples to apples and pick out the lemons when it comes to life insurance.

Keep in mind that New Zealand is a diverse place with people from lots of different lifestyles, so average prices here will be different from other countries. Read on to find out what you need to look for when it comes to price and some of the factors that could influence the cost of your insurance.

Factors that contribute to the cost of life insurance

Your policy and level of cover

As you’d expect, a higher cover amount means you’ll pay higher premiums. Even though you can lower your benefit amount to save on the price of life insurance, it’s important to make sure you don’t leave your family with insufficient cover.

Underinsurance is a growing problem in New Zealand as a lot of people underestimate how much their lives are really worth or how their death could financially affect loved ones.1 The best way to avoid this is to talk to your family about their plans for the future and what their living situation would be like if you weren’t around. This will help you figure out the costs that your family will face if you’re no longer around, and how long you want them to be able to cover these for.

It’s also a good idea to factor in the financial resources you have available such as any savings or long-term investments that will be payable to your family if you were to pass away. These could potentially reduce the amount of money your loved ones will need from your life insurance payout, helping you set a more suitable cover amount on your policy.

Also keep in mind that your family’s financial position could improve as time goes on due to years of working, saving, and just getting a little smarter with your money. This means your ideal cover amount could reduce over the years since your family may be in a better financial position by the time you pass away. So, life insurance should be seen as a risk management tool in case you were ever in a position where your financial needs outweighed your ability to meet them. That’s why it’s worth revisiting your policy and cover amount as your needs change over time.

Life insurance premiums can also be influenced by any optional extras added to your policy. Here’s what some providers will offer you when signing up:

Total & Permanent Disability Insurance (TPD)

As tough as Kiwis can be, sometimes life can knock you down to the point that you can’t work or live independently anymore. Even though you’re still around, your family could feel the financial hit if your regular income was no longer available. Total & Permanent Disability Insurance gives you and your family a lump-sum payout if you become permanently disabled and have been assessed as unable to ever work in any occupation again.

While TPD cover will increase the cost of your premiums, if you were no longer capable of working it could have a serious impact on the long-term financial goals of your family.

Serious Illness Insurance

Think of the hassle of getting the occasional flu or bug. On top of taking time off work, you’re often left tired and unable to enjoy life with the people you love. But imagine how much worse it would be if you ever suffered a serious life-changing illness. On top of not being able to work for some time, you and your family could face years of expensive medical bills to improve your quality of life. That’s why it might be worth looking into Serious Illness Insurance. This can help with the financial challenges associated with your condition or just make life a little easier for you and your family to adjust.

Keep in mind that Serious Illness Insurance won’t cover you for every and any medical condition. You’ll need to check the relevant Policy Document for specific terms, conditions, and criteria that could apply as only certain conditions (like heart attack, stroke, cancer and coronary artery bypass surgery) are covered and in order to claim your condition needs to meet the definitions set out in the policy.

Your lifestyle and personal factors

Smoking

We won’t remind you that smoking is bad for your health – the government does a great job at that already. But if you need another reason to quit then there’s the added bonus of lower life insurance premiums. Most providers require that you go at least 12 months without a cigarette to be classified as a non-smoker, but if you don’t meet this at the time of applying you can request to have your premiums readjusted when you do finally quit.

Age and health

Don’t take it personally – life insurance providers need to know the risk of insuring you, and your age can often play a part in that. This is because depending on your age, you could be more likely to develop health problems which can lead to a claim being made.

Medical history

Your provider will ask you about your health when you apply, including any medical conditions or treatments you’ve had in the past. Make sure you answer these accurately since this information is used to calculate your premiums.

Other personal factors like your gender and occupation can also weigh in on how much you pay for life insurance.

Is it dear? Find out here.

Remember what you’re paying for

It’s easy to overlook or set-and-forget the benefits of your life insurance policy. People also assume that every policy has the same features and benefits – which is like thinking strawberry ice-cream is the same as hokey-pokey! Knowing what you’re covered for and how your policy works is the best way to get the most out of it and figure out whether it’s worth the cost.

Life insurance is designed to put your mind at ease over so many of life’s potential curveballs. Think of it as making sure your family can keep up with the cost of living when you’re gone. Not only that, but they can hang on to the personal and priceless things you’ve built with them. Whether that’s the home you’ve put years of planning and work into, your kids’ future aspirations, or just the important causes you stood for. None of these should have to stop if you passed away!

Doing your research and shopping around will help you get an idea of what your premiums are actually buying you. There’s no need to wander too far from where you are now – here’s what you get with OneChoice Life Insurance.

  • Lifetime cover for ages 16 – 70.
  • A flexible cover amount between $100,000 and $2 million. This lets you set a benefit that’s right for you and your family while controlling how much cover you pay for.
  • Advance payout of $10,000 to cover funeral or tangi costs while your claim is being assessed.
  • Optional cover for both Total & Permanent Disabilities and Serious Illnesses, which can help you with medical bills, rehabilitation, or just some time off to unwind when life doesn’t go as planned.
  • Cover for death by any cause (excluding suicide for the first 13 months and subject to underwriting), so you can stop worrying about losing your life and focus on enjoying it!
  • Choice between yearly, monthly, or fortnightly payments depending on how you like to manage your money.
  • 10% back from your first-year premiums to say thanks for making the smart choice.

Make the call

If you’re keen for a chat, call us on 0800 005 819 from 8am to 8pm Monday to Friday. If you’re too busy enjoying life, we can call you instead, or why not request a quote now?