5 ways to smarter insurance
Did you know there are some smart ways to pay premiums so you make significant savings in the long term?
Here are some ways to make your insurance more affordable:
1. Buy your insurance in super
Did you know that buying insurance through super can be cheaper than buying it outside super?
The same up-front tax benefits you get when you invest in super generally apply when you buy life and total and permanent disability (TPD) insurance through your super fund.
Also, it could be possible to have the premiums deducted from your super account balance, without making contributions to cover the cost from your existing cashflow or savings.
2. Get the premium structure that's right for you
Whether you buy your insurance inside or outside super, it pays to select the premium structure that best suits your needs.
There are a few options to choose from:
- A stepped premium that’s calculated each year in line with your age:
With this, you would pay less upfront when you first take out the policy, but your premiums would increase each year as you get older.
- A level premium that’s calculated on your age and the benefit amount chosen when the insurance started:
Although you might pay a bit more upfront than with stepped premium, your premiums will only change if you’ve selected CPI increases or if we change the policy fees or base premium rates
- A blend of both
You can always switch from stepped to level premium or vice versa, depending on what suits you in the stage of life you’re at.
For example, as you build up assets over time and potentially need less insurance, you could reduce your level of cover on stepped premiums.
Or, if you could switch to level premiums at a later stage to minimise premium increases as you get older. The level premium would be based on your age when you switch.
With this option, your premiums would stay the same, even as you get older, however the level of protection you have would decrease.
3. Make savings on income protection insurance
When buying Income Protection, you can make it more budget-friendly by choosing a longer waiting period for your benefit payment or a shorter benefit payment period to significantly reduce your premiums.
4. Claim premiums as a tax deduction
Another option is to purchase Income Protection insurance outside super, where you’ll have to pay the premiums from your own pocket, but can generally claim the premiums as a tax deduction.
5. Consolidate your insurances
If you and your family hold a few different types of insurance, savings can also be made by consolidating the insurances into one policy – this will help reduce fees.
For more practical solutions that protect your family and maintain your cashflow speak to one of our qualified financial advisers by calling us on (03) 9459 2966.
 Any increases to your benefit amount, including inflation linked increases, are based on your age at the time of the increase.