It seems that you can just about insure anything and everything these days, you can insure against losing your job, against developing a health problem and even against breaking your furniture.

The type of insurances you end up buying really depends on what you want to protect the most.

Waiting Period

Insurance premiums can vary depending on the risk you pose to the pool of money being collected, or the chances of you claiming. So, the best way to reduce premiums is to look at what you really need and then change the terms so that you can only claim if you really need to. Take income protection insurance for example, it pays a monthly benefit, should you not be able to earn an income due to some health problems or redundancy.

Income protection insurance

has a waiting period, usually of at least a month, before you can make a claim. The longer it is, the lower the cost of the insurance. If you are the kind of person who keeps a few months worth of income as a backup in savings, then you could increase the waiting period to reduce the premium.

Trauma insurance is another option to income protection insurance. Basically, it covers the same thing – your inability to work if you are seriously ill. The benefits are defined, so it does not cover quite as much as income protection insurance, but it costs less. Trauma cover pays out as a lump sum.

Locking in your premiums to reduce insurance costs

Many people cancel their insurance when they find the costs are too much to bear, for example when the premiums increase as they get older. There is a way to lock in the premiums until you will hopefully require less insurance. For life and trauma insurance there are options to lock in the premiums until you reach the age of 65 or 80. This can be useful because it is around these ages that you probably want to spend less money.

Excess – low or high?

With other types of insurances which carry an excess, increasing the excess can reduce your premiums. An insurance policy which you are particularly unlikely to claim on could be a candidate for increasing the excess. You could also keep some savings earmarked for paying a higher excess and even add to it from the money you save in premiums.

Dual Cover
With certain health event insurance you can accelerate the payment from a life insurance to reduce the premium.

Say for example you had $100,000 worth of life insurance and $50,000 worth of accelerated complete disability insurance. If you were to make a claim on the disability insurance, then you would be left with $50,000 worth of life cover. This can be a good way to structure your insurance if both policies are covering the same thing, such as debt. So, if a $50,000 debt was all you needed to be paid off, if the worst should happen, this method would make sense. The debt would only need to be paid once, in your untimely death or disablement.

Mortgages Online can help you structure your insurances if you like to keep premiums manageable. We can also provide recommendations based on your own unique circumstances.