How much will your life insurance premiums increase?
If you have life insurance or are thinking of applying for life insurance quotes in the near future there are a few things you should know that will impact the cost of your cover.
New taxation laws that come into effect on 01 July 2010 mean that there will be an increase in tax paid by insurers on life insurance business. Previously this tax has been subsidised to try to rectify the ‘under insurance’ problem in New Zealand. This tax increase will have a flow on effect for insurance customers.
Life Insurance Policies: Grand Parenting
The new tax legislation includes ‘grand parenting’ for existing polices which reduces the immediate effect of the tax impact for insurers on existing term life policies. ‘Grand parenting’ provides a transitional period during which the old tax rules continue to apply for up to five years in most cases.
Most of the term life insurance providers have announced how these tax changes will affect their premiums – a simple guide is below:
- AIA 13% increase in premium for all new policies post 01 July 2010
- Asteron 7.5% increase for new and existing policies, introduced across the next 12 months
- Sovereign 15% increase for all new policies post 01 July 2010
- Tower 7% increase for all new and existing policies, introduced across the next 12 months
- Fidelity 2.5% increase for all new and existing polices for each of the next five years – this increase includes all products e.g. income protection, trauma, permanent disability and term life
- AMP Premiums were increased last year in anticipation of tax legislation changes
- ING Life Details not yet announced
If you are considering adding or making changes to your term life insurance now is definitely the time to act. Give us a call today to discuss your individual needs and situation or talk to us about life insurance quotes.
