When you have a family, you know you would do anything to protect them and the lifestyle you have created for them, but we understand that things may not always go to plan. In the event of your untimely death your loss could affect those you love both emotionally and financially.

 

Knowing you have life insurance cover that can help your loved ones to cope financially should the worst happen will make all the difference. It is peace of mind that your family can pay the monthly bills, potentially pay off any debt and cover some lost income. Everyone’s circumstances are uniquely different.

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Compare life insurance types?

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There are two types of life insurance policies available to meet all sorts of needs and preferences.

Depending on the short- or long-term needs of the person to be insured, the choice of whether to select Rate for Age or Level life insurance is important to consider.

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Rate for Age

Annual (or yearly) renewable term is a one-year policy, but the insurance company guarantees it will renew the policy on each anniversary up until an agreed age, regardless of the health of the insured person, and with a premium set for the applicant’s age at that time.

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Pros: Rate for age policies are the cheapest type of policy initially.

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Cons: Premiums increase year on year because of your age.

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Level - Fixed Life Insurance

Level (fixed) term life insurance policy, where the premiums are fixed at the start and stay the same for the agreed period. Most commonly fixed premiums until age 65, 70 or 80.

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The insurer guarantees the premiums and cover amount don’t increase. You can select to index link a policy. Indexation is an automatic increase to the amount of insurance cover you have, to make sure the value of your cover is not eroded by the impacts of inflation.

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When the time period comes to an end, most insurers convert your policy to Rate for Age.

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Pros: Premiums stay the same no matter your age and can lead to long term premium savings over rate for age polices.

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Cons: Premiums start higher compared to Rate for Age.

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Depending on your situation and goals, it can be worth having just one of the two Life cover options, or a mix of both. At Modern Financial we can tailor your Life insurance cover to best meet the needs of you and your loved ones.

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