Get your Free Financial Fitness score and personalised report

What are the types of premiums on life insurance?

It's always important to get life insurance, as you never know when disaster can strike. For example, the recent Tropical Cyclone Marcia tore through Yeppoon and Rockhampton, with gusts reaching up to 156km/h. While no‚Äč lives were lost, it is a reminder that disasters can happen, and that we have to be ready for them. 

Part of this is securing life insurance – but for many, it's a complicated matter. For example, what kind of insurance do you get? And what kind of premiums do you pay? This second question can confuse many people, so here is a handy explanation of the types of premium you can encounter. 

Stepped premiums

When you take out insurance with stepped premiums, it starts out cheaper and becomes more expensive as the years go by, as the likelihood of claiming life insurance increases. It is recalculated every year and will change depending on your situation. This can sometimes mean premiums even decline, such as if someone who was living a wild and dangerous life moved to a more stable area or settled down with a partner and children.

However, they will generally increase with age. 

Level premiums

This type of life insurance payment is more expensive than a stepped system in the beginning, but it is locked in – payments will not change as you get older. This gives you a significant level of certainty, and pairs well with long-term financial planning. 

When the time comes to choose your life insurance, speaking to a specialist advisor is a great way of determining a financially sound way forward. Everyone comes from a different background and is in a different situation with their money, so a tailored plan is ideal. 

Living in the Whitsunday region presents a unique set of situations and challenges, so it's important to make sure financial planning is put in place. 

Airlie Beach
07 4946 7359
Suite 2
Conway House
6 Island Drive
Cannonvale, 4802
Gold Coast
1300 857 359
Suite 8
2 Fortune Street
Queensland, 4209
1300 857 359
310 Edward Street
Queensland, 4000
07 4945 5349
Level 1
Federation House
20 Chapman Street
Prosperine, 4800
Eclipse Financial Services Pty Ltd | ta Eclipse Financial Services | ABN 47 106 053 249 | Corporate Authorised Representative No 422806 of Professional Investment Services Pty Ltd | ABN 11 074 608 558 | Aust Financial Services License 234951
The Fine Print| Contact Us| Financial Services Guide| Complaints| Privacy Policy