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Keeping up with your premium payments it's crucial to prevent your policy from lapsing. Unfortunately, circumstances do change, new expenses arise and it’s not always possible to keep up with premiums.
But there are a number of options to consider regarding your life insurance policy. Three of these include:
A premium freeze is only available with stepped premium life insurance policies, where the cost rises with age. Applying for a premium freeze is generally as easy as filling out a form and sending it to your insurer.
When frozen, your premiums will stop rising with age, for a set period of time. Typically it can last until you choose to cancel it, or make a claim or adjust your level of cover in some other way. You will still have to pay premiums but the price won’t increase with time, as long as it’s active.
Yes. You can generally unfreeze your policy whenever you are ready, but certain conditions might unfreeze it sooner, depending on your policy. It may unfreeze when you make a claim, reach the next policy renewal date, change your sum insured or otherwise adjust your cover.
It might be the right option if your premiums are becoming unaffordable. However, there are downsides, so it’s a good idea to consider the other alternatives first.
If your premiums go unpaid for too long, you will lose your cover. If they continue to go unpaid, your policy will be cancelled all together.[/fin_accordion]
A common mistake is to cancel your life insurance policy when the cost gets too high. If you do this, it will probably cost more to sign up again later, because you'll be older and might not be as healthy as you were before.
The good news is that you don't need to do this. Everyone's financial situation will change from time to time, and insurers have several options to make sure you don't need to cancel your cover.
Here are some of the brands on Finder that offer premium freezes.
| Brand | What age is this available? | More info |
|---|---|---|
 | Request a premium freeze at any time. This means your future premiums will be fixed at the amount you were paying on the date you notified the provider. amount. | |
 | 35 | |
 | Request a premium freeze or policy cancellation at any time. This takes effect from the next extension date of the plan. | |
 | If you're paying premiums on a stepped basis, you can request a premium freeze on your life, TDP or trauma cover at any time. This excludes policy fees and government charges. | |
 | 30 | |
 | Not specified | |
 | 30 |
Note that premium freeze options will reduce your sum insured amount and might not be available in super policies. Data taken from brand product disclosure statements, June 2021. Benefits, conditions and amounts are subject to change at anytime.
Functionally, suspending your cover is a lot like temporarily cancelling your policy, with the advantage of not actually needing to cancel it. Not all life insurance policies will include a suspended cover benefit, and where they do it may be variously known as a premium holiday, premium pause or other variation.
Unlike a premium freeze which merely stops premiums from increasing, this option means you stop paying premiums entirely. The downsides are also more severe. You will typically lose all your cover, and cannot make claims for anything that occurs while your cover is suspended.
This will depend on your personal circumstances. Some examples where suspending cover might be a sensible cost-saving measure include:
Note: You may be left without any cover if you suspend your premiums. This step should not be undertaken lightly, and it’s a good idea to consider the alternatives first.
Life insurance policies are often more complex and multifaceted than others. This can make it more difficult to navigate, but also means there are many ways to reduce costs.
For more details on ways to lower your premiums, and other options to consider, try going over our guide to reducing life insurance premiums.
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When lockdowns strike, what are your options - and will your insurance help?
I am between jobs and would like to know if it is possible to not pay my premium this month and then resume the following month, but still be covered.
Hi Sharmane,
Thanks for your question. Life insurance policies usually allow you to pause premiums during financial hardship. Your case sounds a little different – so you may need to get in touch with your insurer to find out what your options are.
I hope this helps,
Maurice