6 Ways To Reduce Your Insurance Premiums
With the cost of living on the rise, many Australians are feeling the squeeze as insurance premiums go up across the board. Whether it’s car insurance, private health cover, life insurance, or home and contents, premiums have risen by as much as 14% in the past year alone.
These increases can add up quickly, making it a smart time to review your policies and explore ways to save.
Here are six effective strategies to help you reduce your insurance premiums:
1. Review your cover amount.
Over time, your financial circumstances and personal needs can change. The insurance cover you set up years ago might no longer be relevant. For example, if your children are no longer in private school or your mortgage has decreased significantly, you may not need as much cover as you originally planned.
You can often reduce the level of cover simply by contacting your insurer and requesting the change in writing. Even adjusting your cover to 60% of what you originally needed could lead to substantial savings.
2. Compare insurance providers.
If you’ve held a policy with the same insurer for many years, there’s a good chance your premiums have steadily increased. Insurers may raise prices on older, less profitable policies to encourage customers to switch or cancel.
Shopping around could uncover more competitive rates with other providers, especially if new insurers are offering introductory deals or better features. A fresh policy might save you hundreds of dollars a year without compromising your coverage.
3. Review exclusions and health loadings.
Health-related loadings and exclusions can significantly inflate your premium (sometimes doubling it!). But they’re not always permanent.
In many cases, you can contact your insurer’s underwriter to ask what’s required to reduce or remove those extra costs. For example, if you’ve taken steps to improve your health or manage a previously excluded condition, the insurer may reconsider.
Smokers in particular can see major savings. Quitting for 12 months and notifying your insurer could halve your life insurance premium.
4. Adjust the waiting period.
For income protection policies, the waiting period is the time between when you’re unable to work and when you start receiving benefits. A standard waiting period is 30 days, but extending this to 90 days can typically reduce your premium by up to 30%.
If you have savings or an offset account to fall back on, this small change can offer big rewards without significantly increasing your risk.
5. Review your benefit period.
Benefit periods determine how long you’ll receive payments from your policy. They are often set to age 60 or 65. Most claims are resolved within the first few years.
Shortening your benefit period, for example from age 65 down to five years, can lower your premiums significantly without exposing you to undue risk.
6. Take advantage of wellness discounts.
Some insurers offer discounts of up to 20% for maintaining healthy habits and completing annual check-ups. You might qualify for these discounts simply by logging regular walks, attending the gym, visiting your GP or dentist annually, or completing basic wellness checks.
Not only can these incentives help lower your premiums, they also encourage better long-term health outcomes.
Insurance is essential, but rising premiums shouldn’t force you to go without protection. By proactively reviewing your policies and making strategic adjustments, you can keep your cover affordable and appropriate for your needs.
If you’re unsure where to start or want help reviewing your policies, our team is here to assist. We can help identify savings opportunities while ensuring your cover still meets your needs.
This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your financial adviser.
