Regular payments for your insurance are referred to as premiums and they will vary depending upon the amount insured and your age. There are essentially two premium types for personal risk Insurance policies, Yearly Renewable Term Premium and Level Premium.
- Life Cover Yearly Renewable Term (YRT) - Gives you the flexibility to pay for cover you need now. Premiums are based on your current age, with increases each year. Yearly Renewable Term Premiums are less expensive at the start of the policy but they increase each year as you get older. The premium will increase with your age even if there is no increase in the amount you are insuring.
- Life Cover Level - Gives you certainty and long-term affordability with a structure that provides level premiums for the term selected. Level Premiums are more expensive at the start of the policy but remain at a constant level as you get older. The premium will increase with the age unless the sum insured is increased. You can select the period of the insurance cover for 10, 15, 20 years.
Yearly renewable premiums are usually lower in the early years. Level premiums can be a more cost-effective option in the medium and long term and make it easier to continue with your insurance given they are more affordable later on. Level premiums are consistent over time, while yearly renewable premiums increase significantly as you get older.
If you already have a YRT cover and wish to switch to Life Cover Level, it is very easy to switch with no underwriting required. You just need to sign a letter for the change to be made.