Mike Reynolds
Mike Reynolds

Director / Adviser


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Get serious about life insurance and income protection before your options are limited

Australia’s world-beating life expectancy rates and the high quality healthcare system that underpins them are impressive. Unfortunately, the downside of our longevity is the increased pressure it places on the cost and availability of insurance.

The younger you can apply for cover, the better - but by the time many of us get serious about insurance, our options are already reducing. Qualifying criteria get tougher for Life, Critical Illness (Trauma), Income Protection and Total and Permanently Disability (TPD) insurance as we age. Premiums are frequently more expensive too.

Taking action when you’re young and healthy makes it much easier to qualify for affordable premiums, now and in the future. Here, our resident insurance expert Nick Stanley explains how premiums are changing and how you can get the most cost effective solution over a lifetime.

With age comes cost

Many of us are now working longer. Consequently income protection policies run longer, with protection now extending to age 70 in some cases, rather than 65 - though these policies are more expensive. Life insurance can run up to age 99, but usually becomes cost prohibitive in your 60’s and 70’s.

Better quality options

Over the last 20 years, Critical Illness, Income Protection and TPD policies have become much more comprehensive. If you’re a young professional or parent in your prime income earning years and seek to protect your family’s lifestyle in the event of sickness or injury, these improvements will likely be beneficial.

Making the grade

The downside of policy improvement is it’s harder to qualify for comprehensive and affordable policies. More comprehensive policies and increasing claims are costing the insurance companies a lot of money, so you may be subject to additional charges (loadings) and/or exclusions if you have a pre-existing condition. This trend is likely to continue over the next 5-10 years.

Stepped vs level premiums: which is best for you?

Level premium

  • Higher initial cost
  • Pay less over time, if you take out and keep a policy in your 20s/30s
  • Less flexible provider and policy terms

Stepped premium

  • Starts off cheaper and increases annually
  • Policy may become too expensive when its most needed (your high risk years)

Depending on your individual circumstances, a combined stepped/level premium is sometimes the best solution.

The early bird wins

When it comes to insurance, it really does pay to act sooner rather than later. Life might be unpredictable, but the peace of mind that comes with knowing you have the right cover means you’re free to enjoy life!

Have questions about your insurance needs? A qualified FMD adviser can help - talk to us today!

General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977.