Reviewing the Cost of Your Life Insurance Premiums: When and Why It Matters

Life insurance is one of the most important financial safety nets you can have, but many Australians don’t regularly review their policies. Premiums can increase over time, and what suited your needs a few years ago might no longer be the right fit today. With rising living costs, it’s natural to ask: Am I paying too much for life insurance? or Is there a better way to manage my premiums without losing cover?

In this article, we’ll explore why it’s important to review your life insurance premiums, how to manage costs, and the questions people commonly ask.

Why Review Your Life Insurance Premiums?

Life circumstances change. You might have:

• Paid off a mortgage or reduced debt

• Started a family or become an empty nester

• Changed jobs or income levels

• Built up savings and superannuation

Your insurance should reflect these changes. A review can help you:

• Ensure you’re not over-insured (paying for more cover than you need)

• Adjust your policy to match your current stage of life

• Find opportunities to save money on premiums

What Factors Affect the Cost of Life Insurance?

Several key factors influence your premium:

1. Age – The older you are, the higher the premiums.

2. Health – Pre-existing conditions, lifestyle choices, and smoking status affect pricing.

3. Policy type – Stepped premiums increase annually with age, while level premiums start higher but remain more stable over time.

4. Cover amount – Higher levels of cover naturally mean higher costs.

5. Insurer differences – Different providers price risk in different ways.

6. 
   

Common Questions People Ask

1. How often should I review my life insurance premiums? At least once a year, or whenever you experience a major life event such as marriage, having children, buying property, or retiring.

2. Can I reduce my life insurance premiums without losing cover? Yes, strategies include switching to a level premium structure, adjusting the benefit amount, or comparing insurers for a more competitive rate.

3. Why are my life insurance premiums increasing every year? If you have stepped premiums, they rise as you get older. Some policies also increase cover with inflation, which can push costs higher.

4. Is it worth switching insurers to lower my premiums? Sometimes. Comparing policies may reveal better rates, but be mindful of waiting periods and exclusions if you switch.

5. Can I cancel my life insurance if it gets too expensive? You can, but consider the financial risks. Cancelling cover may leave your family without protection. A better option may be adjusting the policy to suit your budget.

Tips to Keep Life Insurance Affordable

• Review your policy regularly – Don’t set and forget.

• Ask about premium options – Stepped vs level, or hybrids.

• Check for duplicate cover – Sometimes superannuation includes life insurance.

• Shop around – Compare different insurers.

• Work with an adviser – A broker can help tailor cover to your needs without overpaying.

• 
  

Final Thoughts

Reviewing the cost of your life insurance premiums isn’t just about saving money—it’s about making sure your policy still protects what matters most. With cost-of-living pressures and changing family needs, a quick review can give you peace of mind and possibly free up extra room in your budget.

At Covermate Life, we help Australians find the right balance between affordability and protection. If you’re wondering whether you’re paying too much for life insurance, now is the perfect time for a review.