Learn options for paying insurance premium for homeowners insurance in this free video series that will clarify all the different caveats of homeowners insurances policies. Expert: Romie Brown Bio: Romie Brown is a 1992 Graduate of the University of Toledo with a degree in Bachelor of Arts, Public Relations. He has been an insurance agent for 10 years. Filmmaker: Akita McCulloch

Stepped or Level Premiums for Life Insurance?

When looking for the right Life Insurance policy within Australia, it is vital to consider which premium structure you want to choose. Stepped premiums are fantastic in the small term, though will end up costing you a lot more in the longer term.

“When discussing with clients, I always question for how long they see themselves needing life insurances and income protection.” says Peter Kaleta Principal Adviser from Life Shield. ”If the answer is ‘long term’ (greater than 5-10 years), then it is worth considering a level premium structure for their new policy.”

Normally you are only told about stepped premiums as these are the cheaper option, at least initially and therefore is simpler for the broker to ’make the sale’. Stepped premiums are re-rated each year at renewal as per the client’s age and therefore the cost goes up. The older you get, the higher the increase is. The problem here is, that once you are in your fifties and even sixties, the cost of your insurance becomes so high that often clients are forced to either reduce their benefit or cancel the cover all together. This potentially leaves the client without the required cover at a time when they need it most.

Level premiums do not have age based increases and therefore do not have the dramatic increases in cost over time. In fact, the only increases in cost that you will have on your policy are due to CPI (Consumer Price Index – linked to inflation of between 3-5% pa) (and the sum insured will also increase each year by this amount) or general rate increases imposed by the insurer.

Level premiums give you the certainty of knowing what you will pay for your insurances up to age 65 in most cases. Once you are of age 65, the premium will revert to a stepped structure and therefore start to increase each year.

As an example, a male aged 40 with $100,000 of life insurance will pay approximately $15 per month (depending on which company is chosen) initially and a total spend up to age 65 of nearly $15,000. On the level premium structure the same person will spend initially $24 per month but up to age 65 the total cost is less than half at $7,000.

Initially there is the cash flow issue as you will be paying more than you need to, but in the longer term the cost of a level premiums structure will be well below what you would on a stepped premium.  

More information – visit www.lifeshield.com.au

If you do not have medical insurance, or the appropriate level of coverage, a major medical emergency could leave you with nothing. In order to prevent this from happening to you it is vital to know about the different types of medical insurance, so you can make sure that you have the coverage that best suits your needs and your current financial situation.

In America today, the PPO (Preferred Provider Organization) is the health insurance plot of choice for the majority of people with private health insurance. PPOs require you to use in network doctors and facilities, but do not typically require referrals for specialists. PPOs usually require you to pay a co-pay when you see your doctor, or go to the hospital or a walk-in clinic. Based on the strength of your insurance company, and where you live, there may be many doctors and facilities available for you to choose from, or there may not. This is certainly something that should be researched before making a choice to join a PPO plot.

No matter what type of insurance plot you choose, there are several factors that are the same. The more you pay for your monthly premium, the less your co-pay will typically be. Mental health and substance addiction coverage are not part of the standard medical coverage, but may be offered by the insurance company, depending on the company and the state. If you are switching insurance companies, and you are already receiving treatment for an existing medical condition, it is absolutely critical that you find out if your new insurance will cover the pre-existing condition, if not it may not be worth it to switch.

If you are interested in a plot that will not limit you to certain doctors or facilities, then an HDHP (High Deductible Health Plot) may be right for you. The HDHP is a health savings plot, that deducts money from your salary each month before taxes are applied. The money is saved in either a Health Savings Account or a Family Savings Account. When you incur medical expenses, whether it is for doctors visits, medicine, or other over the counter health care needs, you can use the money in your HDHP to cover the costs. If you choose a Family Savings Account the savings can even be used for child care. One additional benefit with an HDHP is that certain doctors may provide a discount to HDHP participants.

Finally, the HMO, or Health Maintenance Organization is an insurance option for older adults. HMO plans vary widely by state. In all HMO plans, but, you will have to select a primary care provider. Before you receive any specialist treatment, you will have to go see your PCP. He or she will issue you a referral. Like a PPO, HMO plans operate using copay and coinsurance.