How to reduce your premiums

When a premium becomes uncomfortable, the instinct is to cancel or to cut the sum insured. Both work, and both are the bluntest instruments available. There are several steps in between that reduce cost without reducing what arrives at claim time.

It helps to think of the levers in order of what they cost you. Some are free — you are simply not claiming a discount you are entitled to. Some cost you flexibility. Some genuinely reduce the cover, and those belong last.

One rule sits above all of them: never cancel existing cover until replacement cover has been accepted in writing, with any loadings and exclusions disclosed. The gap between cancelling and being accepted is where people become uninsurable.

1. 1Quit smoking and apply for non-smoker rates. Most insurers re-rate after a qualifying smoke-free period, commonly twelve months. It is not automatic — you must apply. This is the largest single saving in the market.
2. 2Pay annually instead of monthly. Most insurers apply a frequency loading to monthly payments, so an annual payment costs less over the year for identical cover.
3. 3Consolidate covers with one insurer. A multi-benefit discount plus a single policy fee instead of two can be worth more than switching insurer.
4. 4Extend your income protection waiting period. Moving from four weeks to thirteen or twenty-six reduces the premium substantially, and costs you only the savings you would run down first anyway.
5. 5Drop riders you do not need. Waiver of premium, redundancy add-ons and duplicated benefits accumulate over the years and are rarely reviewed.
6. 6Move from agreed value to indemnity on income protection. Cheaper, and it shifts the proof of income to claim time — which matters most for the self-employed and least for stable salaried income.
7. 7Reduce the sum insured. Effective, immediate, needs no medical evidence — and it is the only lever on this list that reduces what the policy actually pays.

What not to do

• Do not cancel and reapply to get a cheaper price without checking whether your health history would still be accepted. A diagnosis since your original application changes everything.
• Do not switch off indexation without understanding whether you lose the right to increase later without underwriting.
• Do not shorten an income protection benefit period to save money. That saves in the same way cancelling saves.
• Do not drop trauma cover because life cover feels more important. Trauma pays for the far more likely event.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• Whether a cheaper quote elsewhere accounts for your current health, or assumes the clean history you had when you first applied.
• Whether a first-year discount is making a replacement policy look cheaper than it will be in year two.
• Whether the cheaper policy has the same definitions — a lower price often means a smaller promise.
• Whether dropping a rider forfeits a right you cannot get back, such as a conversion or future insurability option.
• Whether reducing cover now leaves a gap you would need new underwriting to fill later.

Every New Zealand insurer writes what life insurance costs in nz to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• An adviser can tell you whether your existing policy is better than what is currently on sale, which decides whether shopping is worth the underwriting risk.
• Chasing a smoker re-rate, a multi-benefit discount or a corrected occupation class is unglamorous work that an adviser will actually do.
• Restructuring — part level, part stepped, or splitting between insurers — often saves more than switching brand.
• Where the premium is genuinely unaffordable, an adviser can model a smaller policy you will keep rather than a larger one you will lapse.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.