Once we reach our 40s, most of us start thinking more seriously about protecting our families, our income, and the life we’ve worked hard to build. Life insurance plays a major role in that security. One thing that often catches people off guard, though, is just how much premiums can increase as we age.
If you’ve noticed your premiums creeping up each year, or you’re worried about how affordable your cover will be in the future, understanding how to level your premiums can make a real difference to long-term affordability.
Why premiums keep rising
Most insurance starts relatively cheap, then steadily increases over time. The reason is simple. As we get older, the likelihood of claiming rises, and your premiums reflect that increased risk.
In your 20s and 30s, the changes are usually small. But once you reach your mid-40s and 50s, those increases can become much more noticeable. This is often the point where people tell me, “My insurance used to be so affordable. What changed?”
How level premiums keep costs manageable
A level premium gives you a steadier, more predictable cost over the long run. Instead of rising every year, your premiums remain more stable.
That said, levelling premiums is not the right option for everyone. The best structure depends on your long-term goals, how long you need the cover for, and what you want your future insurance budget to look like. When used as part of a wider strategy, levelling premiums can give you greater control over your premiums and help manage long-term affordability, rather than leaving you exposed to sharp increases later in life.
The trade-off works like this:
- You pay a little more in the early years
- But you avoid sharp premium increases later on
It’s a bit like choosing to pay extra on your home loan now so you’re not hit with a much larger financial burden later.
The earlier you level your premiums, the better
A common mistake I see is people waiting until their 40s (or later) to consider levelling their premiums. By then, prices have already climbed.
If you set your premiums to stay level when you first take out your insurance, you lock in lower prices from those younger years. This long-term approach is much more cost-effective. It’s like saving for retirement. The earlier you start, the more powerful the benefits.
A smart strategy: split your cover
Another helpful option is to split your cover into different structures, similar to how many people split their home loans.
For example, you might:
- Keep part of your insurance on a level premium until age 65 to cover your working years
- Keep another portion on a rising-each-year structure for short-term needs like raising children or covering your home loan
This approach can help you keep long-term costs down while still covering the things that matter most right now.
Final thoughts
If you’re over 40 and noticing your premiums rising quickly, now is a great time to review how your cover is set up. Levelling your premiums can make your insurance more predictable and much easier to manage across the years.
Plus, if you’re younger, start early. It’s one of the smartest financial moves you can make for your future self.
If you’d like help understanding which premium structure is right for you, the team at Apex Advice is ready to help you get your insurance sorted for future you.
Complete the form below to speak with an insurance adviser today.
