A premium is the regular payment you make to ensure your policy remains in-force and you are protected in the event of a claim. Life insurers in Australia may offer the option of taking stepped or level premiums.
NobleOak’s range of life insurance products only offer stepped premiums. This means your premium will increase each year at each policy anniversary, based on your age.
The annual premium increases because the probability of you needing to make a claim increases as you get older. For younger individuals, you may find your premium is initially lower (compared to a level premium structure), however will accelerate slightly each year as you get older.
In contrast, with a level premium, the cost of life insurance is spread evenly over the life of the policy. Typically, your premium would be more expensive than a stepped premium option for your age when you take out a policy, however tends to become cheaper (when compared to a stepped premium option) as you get older.