In the insurance world, paying for more insurance than you need is just as bad as being underinsured. Whether you view life insurance premiums as unavoidable or are already on board with their importance, there are always ways to reduce the amount you are paying. Here are four simple ways to pay less for life insurance.
How Many Super Accounts Do You Have?
You should already know that your super account trustees are legally obliged to provide members with life insurance. Premiums are typically deducted from your super contributions. The mistake that many Australians make is not to investigate how much they are covered for through their supers. The best way to pay less for many people who have moved through different companies throughout their working lives is to see whether they can consolidate their supers. If you don’t know how many supers you have or think you have lost a super account, the Australian Taxation Office will help you track them down. Consolidation is the best route to save cost and pay less for life insurance.
Consolidate Or Increase Contributions
Although consolidation may give you good levels of life insurance coverage for less, there are many important considerations to make. A financial advisor may be best placed to help you look at the investment performance of the fund and the fees charged before making any decision. An insurance broker may shed light on the level and type of insurance benefits you have available through your supers and how these compare with private insurance options.
Increase Contributions through Your Workplace Insurance Scheme
If you are an employee, you may already have coverage for a wide range of insurances such as life insurance, total and permanent disability insurance, income protection and even trauma insurance. The best value route to life insurance in this situation would be to enquire whether you could increase contributions to give yourself a higher level of coverage.
Claim Premiums as a Tax Deduction
If you have looked into the life insurance coverage offered through your supers and your workplace coverage, you may find yourself looking at private life insurance policies. Depending on your circumstances, you may find that some insurance premiums are tax deductible. This is an excellent opportunity to pay less for life insurance. For Term Life Insurance paid outside of Super contributions, premiums are not tax deductible but tax does not apply to benefit payments.
Choose a Policy that Covers Your Level of Need
The best way to lower your premiums for life insurance is to adjust the sum insured so that it accurately matches your needs. The level of coverage offered by a super fund may not exactly cover the needs of you and your family but this is generally quite easy to adjust. When private life insurance is required, however, you should carefully check if the product provides for indexation to account for the effect of inflation over time. This is an important part of finding the right level of coverage for your situation without paying over the odds on insurance premiums.
About the author:
Miley Brooke, the author of this post, works for Donnellys for Insurance, home to the finest business insurance brokers. A passionate reader, she often writes articles on finance and reducing expenses. You can connect to her team on Google+ and have a look at their profile on LinkedIn.