If like many, you have purchased a life insurance policy but are unsure if you purchased it as a reviewable or guaranteed premium, then you might find that your policy becomes unaffordable after a number of years. The process of finding a new life insurance provider would begin again, and, as life insurance premiums increase with age, you’ll likely end up paying more for your next policy.
So, the question is, do you take out a guaranteed or a reviewable premium?
What is meant by a guaranteed premium?
If you have a guaranteed premium, the premium you pay remains the same for the duration of your policy, unless you alter your plan. The benefit of this is that you will always know what your premiums will be and can budget accordingly.
What is meant by a reviewable premium?
Reviewable premiums are guaranteed for the first five years of the policy, after which, the insurer has the option to review your premium on a regular basis. This means that your premium could potentially increase and may become unaffordable. Reviews are generally based on data such as claims statistics as opposed to your personal circumstances.
Rob Dales, life insurance expert at Payingtoomuch.com said: “When clients realise their premiums aren’t affordable and look to get a better rate online, they often find their premium has increased due to their age difference or a change in their health circumstances. A guaranteed premium is a good way of knowing exactly how much your policy will cost you per month so you don’t get any nasty surprises.”
“I’ve spoken with countless clients who have previously bought a policy with a reviewable premium and they generally don’t understand the different options available to them. They buy these policies and then suddenly realise after 10 years they can’t afford it due to the premium increase.”
What can you do to ensure the best value life insurance?
For any queries or to obtain a quote, please contact Rob and the life insurance team on 01243 219 972 or visit www.payingtoomuch.com/insurance/life-insurance