Providers usually charge policyholders individually, based on the policyholder’s unique profile. The most common factors considered when determining life insurance premiums are the following:
While this list is not exhaustive, it will give you an idea of what insurance providers consider when determining your premiums.
An ‘average rate for age and gender’ analysis will assist you in understanding how much you can expect to pay for your life insurance premiums.
Age: A study by the Financial Markets Authority (FMA) and the Reserve Bank of New Zealand (RBNZ) revealed that the average annual premium for a life insurance policy in New Zealand varies depending on the age of the policyholder.
Generally, younger individuals pay lower premiums as they are healthier and have a longer life expectancy. Premiums tend to increase as policyholders age, especially once they reach their mid-50s and 60s, due to an increased risk of illness or death.
The study found that the average cost of life insurance in New Zealand for a 30-year-old with a death benefit of $500,000 was $13.60 per week, while the average premium for a 50-year-old was $39.50 weekly. For a 60-year-old policyholder, the average weekly premium was $92.50, and for a 70-year-old policyholder, it was $175.7 weekly.
Be aware that these are just averages, and individual factors, such as health, occupation, and lifestyle, can significantly impact the cost of life insurance.
Gender: The FMA and RBNZ study found that the average premiums for life insurance are higher for males than for females in New Zealand.
For example, a 30-year-old female can expect to pay around $9-$15 per fortnight for a $500,000 life insurance policy, while a 50-year-old female can expect to pay around $36-$50 per fortnight for the same policy.
Similarly, a 30-year-old male can expect to pay around $11-$17 per fortnight for a $500,000 life insurance policy, while a 50-year-old male can expect to pay around $46-$58 per fortnight for the same policy. In 2019, the average annual premium for a male was $1,268, while the average premium for a female was $938.
According to a 2020 report by the Financial Services Council, a 35-year-old non-smoking male in New Zealand can expect to pay an average of $1,600 per year for a life insurance policy with a $1 million death benefit. The cost for a female of the same age was slightly lower, at around $1,400 per year.
While gender has a significant effect on policy premiums, bear in mind that pre-existing medical conditions or high-risk behaviours can also impact the cost of life insurance.
It is a good idea to compare life insurance policies from different providers. Policywise can help you work out how much your premiums would cost based on your age, gender, health, and lifestyle. Book a 5-minute callback with us for in-depth quotes, comparisons, and a recommendation tailored to your needs.
Life insurance is an essential investment for anyone looking to provide financial security for their loved ones in the event of an unexpected death. However, the price of your policy can vary greatly based on factors such as age, health, lifestyle, and cover amount. Here are some ways to potentially lower the cost of your life insurance premiums:
By improving your health and making smart cover decisions, you may be able to lower your life insurance costs and ensure that you have adequate financial protection for yourself and your loved ones.
When researching for a suitable life insurance provider, have a clear understanding of how premiums are calculated so you can keep your costs as low as possible. To find an affordable policy, compare offerings from different insurers and consider cover, features, and benefits. Discussing potential discounts with an adviser and adjusting your cover to fit your needs can help lower your premiums while ensuring you get the best value for your policy. Still got questions or need help? Get some advice from one of our licenced Policywise advisers to help you find the best and most cost-effective deal with top life insurance companies in New Zealand.
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