Why your premium went up

Almost every increase falls into one of four categories, and the difference matters because your options are different in each case.

The most common is simply age. If your policy is on stepped premiums, the insurer recalculates the price each year against your current age. In New Zealand those increases typically run somewhere between 2% and 15% a year, and they accelerate as you get older — the rise you absorbed at 35 is applied to a much larger base at 58.

The second most common is indexation, and it is the one people most often do not realise they agreed to. Many policies increase the sum insured each year in line with inflation unless you decline, and the premium rises to match. Your cover grew; you were just not paying attention when it did.

The one that surprises people: repricing

Insurers generally reserve the right to reprice a whole class of policies, and that right usually applies to level premiums as well as stepped. Level removes the age-related component; it does not guarantee the rate table stays where it is. If you are told your level premium has increased, ask to see the clause in the wording that permits it, and ask what notice was required.

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

• Whether the increase came with a sum insured increase — that single comparison identifies indexation immediately.
• Whether a first-year discount has ended, which is common and often not flagged clearly.
• Whether indexation on a level policy is being priced at your attained age.
• Whether the insurer has given the notice its own wording requires for a repricing.
• Whether you are still paying for riders or benefits you no longer need.
• Whether cancelling in response to an increase would leave you unable to replace the cover.

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.

• The wording that permits an insurer to reprice a class differs, and knowing what yours says is the difference between accepting an increase and questioning it.
• Where an increase makes cover unaffordable, an adviser can model reducing the sum insured, dropping riders or changing structure before you cancel anything.
• If your health has not changed, the market may be cheaper. If it has, staying put is usually right — and an adviser will tell you which situation you are in.
• Indexation can usually be declined for one year or switched off entirely, and the consequences differ.

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.