The increasing cost of life insurance may have you wondering whether it’s worth it. But instead of cancelling your cover – and losing valuable protection – a better option is exploring how you can reduce your premiums.

We understand rising costs can make life insurance seem expensive. But before you consider cancelling your cover, and losing your protection, there are ways to adjust your policy to better suit your budget.

Whether it’s changing your cover amount, reviewing optional extras, or adjusting payment frequency, small changes can make a big difference.

Why do life insurance premiums increase?

To remain sustainable and continue supporting customers, insurance companies have to charge enough in premiums to cover the costs of paying claims. This means the higher the risk of you making a claim, the more an insurer will charge to cover you.

Risk is calculated using current statistics from the general population. Because older people are statistically more likely to make a claim on life insurance, insurers usually charge a higher premium as you age.

If your policy uses variable age-stepped premiums (also known as stepped premiums), your costs may go up each year based on your age. You can read more about life insurance and premiums here.

How your premium is calculated

We calculate your premiums based on a range of factors including your age, occupation, and lifestyle. The structure, options, and amount of cover you have selected can also impact the cost of your cover.

When you apply for cover, we ask you a series of questions to ensure we can provide you with the cover and determine whether we need to apply any special terms.

Contributing factors to cost:

1. Age
2. Gender
3. Health and family history
4. Pre-existing medical conditions
5. Your occupation
6. Lifestyle choices (smoker status, sports and recreational pursuits)
7. Premium structure (variable age-stepped vs level premiums)
8. Any discounts (if you are eligible)
9. Policy fees (if applicable)
10. Inflation proofing
11. Your state of residence (this determines any stamp duty that may be applicable)
12. Other factors.

You can read more about how we calculate your premium here.

Ways to manage your premium costs

The key to managing your premium costs is regularly reviewing and adjusting your cover.

Here are some practical steps to help keep your cover affordable:

1. Work out how much cover you need

   Calculate how much you’d need to pay off debts and provide for your family if you become unable to work due to an accident, illness, or passing away. If you have less expenses than you did when you purchased your policy, you may be able to reduce your cover amount without any worries.

2. Pause automatic indexation if needed

   If your policy has an indexation feature (also known as inflation-proofing), the amount you're insured for increases each year in line with the rising cost of living (CPI). If you decide you don’t want or need indexation on your policy for the coming year, you can opt out for 12 months in the Customer Portal within 60 days after your policy’s anniversary. Alternatively, feel free to call us on 13 65 25.

3. Review your policy’s options, benefits, and loadings

   Your cover may include extras that no longer suit your needs. Reviewing your policy can help ensure it’s still aligned with your life today.

   If you’ve made positive lifestyle changes - like quitting smoking or improving a health condition - some loadings may no longer apply. And if certain benefits aren’t relevant anymore, removing them could help lower your premium.

   It’s about keeping your cover meaningful and manageable.

4. Look at your Waiting Period and Benefit Period

   You can change the Waiting Period and/or Benefit Period on your Income Protection (IP) cover to reduce the premiums you pay. If you’re willing to wait longer for your first payment (the Waiting Period) or reduce how long you’re eligible to receive IP payments for (your Benefit Period), your premiums should also be less.

5. Change your payment frequency

   If it’s an option for you, paying your premiums upfront or half-yearly, rather than monthly, will mean you’ll save on paying payment admin fees.

Keeping your insurance costs under control

There are many ways you can adjust your insurance to make it better fit with your budget without cancelling your cover. For expert advice on options that suit your personal circumstances, we recommend speaking with a financial adviser.

If you don’t already have a financial adviser, visit moneysmart.gov.au. It’s a government-run resource where you can search for licensed professionals, including financial advisers who specialise in life insurance, superannuation, and investments.

Find an adviser

Alternatively, if you’re having trouble making a premium payment due to financial hardship and want to discuss your options, we’re here to help. Call us on 13 65 25 between 8.30am and 6pm (AEST/AEDT), Monday to Friday.