Stepped premiums are the most common way to pay insurance premiums. They’re calculated on your age, with premiums generally increasing with your age. Premiums are typically higher the older you get, since you’re considered more likely to fall ill or be seriously injured. Stepped premiums are recalculated annually at the policy anniversary. Although they are less expensive at the beginning, they will rise substantially the older you get.
With level premiums, you pay more in the beginning, but the premium costs average out over time so that you can end up saving money. Usually a level premium remains constant until the age of 80. Apart from the savings over the life of the policy, level premiums offer security – you know in advance what your premiums will be so you can guarantee you can afford it in the future. The premium doesn’t increase annually and remains the same till the policy ends (except for modest yearly increases relating to inflation)
"Understanding stepped and level premiums is vital to determine just how much money you’ll pay over time on your insurance policy"
STEPPED VS LEVEL PREMIUMS
HOW MUCH WILL YOU EARN IN YOUR LIFETIME?
"Most people earn a small fortune during their lifetime. Yet many of them are unaware of how their annual income adds up over the years."
Assuming that you start work at age 20 and retire at 65 you are likely to earn somewhere between $6 million and $9 million in your working career! As a married couple your combined earnings could be as high as $12 million to $15 million.
You can work out how much this could be for you by clicking HERE
If you have a bachelor's degree you will earn about three times as much money than an individual who dropped out of high school, and a bit under twice what a high school graduate might earn. Interestingly, a master's degree doesn't provide that much of a lifetime earnings premium over a basic bachelor's degree, nor does a PhD deliver much additional income over a master's degree.
WHY USE AN INSURANCE ADVISOR?
"In order of importance, these are the things that matter to people considering insurance: Cost - Ease - Speed - Peace of mind that everything is covered"
Cost - Contrary to popular belief almost all of the packages and prices configured with the help of an experienced advisor are actually better than direct insurance pricing. Advisors are professionally trained to choose the right policy for their customers, and not to under insure, therefore avoiding unnecessary claims while maintaining the correct premium income.
Ease - Many people have the impression that buying policies on-line is the easiest option. Direct consultation with an advisor provides a significantly more pro-active relationship. Advisors answer queries face-to-face, by personal email or phone and help to reassure customers with a human service. Furthermore, most direct services completely fall down when queries or changes are required that were less common, particularly later in the policy life cycle. Advisors really shine here!
Speed - There is little difference between online and advisor speed. The direct services often fall back to large call centres whose staff have little or no real insurance knowledge. In this area advisors are more efficient, making highly useful suggestions and saving lots of time. Advisors generally manage policies throughout the policy life cycle.
Peace of mind that everything is covered - Advisors are far more efficient at cross checking policies than consumers, also very good at educating their customers, explaining what types of cover are available and answering queries. Direct processes put too much responsibility on the consumer to do this work themselves and cannot compete with the level of service provided by advisors.
Overall, advisors are far better trained and equipped to deal with specific insurance questions and used to a human discussion, give people a stronger feeling that they are in safe hands.
NOT FEELING WELL?
"The leading cause of death for men in NZ is heart disease, followed by stroke, chronic lower respiratory diseases and lung cancer.."
The causes of death are in the same order for women, but the rate of heart disease among men is almost twice that of women. Death rates are considerably higher for Maori than non-Maori. Both transport accidents and suicide are significant causes of death among men, especially younger men. The male rate for these is almost three times the rate for women. Prostate cancer, an exclusively male condition, is the seventh most significant cause of men’s death - a rate similar to breast cancer among women.
The major causes of sickness in NZ men mirror the leading causes of death, with the addition of mental health problems. Depression is the leading cause of mental ill-health in NZ men. As the population ages, various forms of dementia are likely to become more common. Your health is precious. If you fall sick and can’t work you will need money to pay the bills. Insurance can help you make ends meet if you are unable to earn your normal income. There are many types of health-related policies such as:
Medical Insurance, which covers private hospital care and specialist and test cover.
Trauma Insurance (also called Critical Illness), which provides a lump sum if you are diagnosed with certain illnesses such as cancer, stroke, heart attack etc.
Income Protection Insurance pays a percentage of your income on an on-going basis if you cannot work due to illness.
Disability Insurance, which pays out a lump sum for permanent disablement through sickness or accident.
Mortgage Protection Insurance to cover your mortgage if you can’t work.