If you like to know exactly what you’ll pay for a product from one month to the next, you may want to consider fixing your life insurance premiums.
As you pay the same every month for your life cover, you have the assurance of what to expect. The premiums don’t increase annually and they offer protection against inflation.
But they may not be for everyone. The premiums are expensive, so if you are just starting out in your career, this may be difficult to maintain. The policy isn’t flexible, so you won’t have the option to increase or decrease premiums. Also, the sum insured remains the same for the duration of the policy.
Lee Bromfield, CEO of FNB Life, says: “When choosing this option, it is worth considering how much the premiums will cost you in the next 10 to 20 years so that you can assess affordability. For example, the premium of a 30-year-old with a 5% premium escalation option will more than triple by the time they are 55 without any commensurate increase in their cover. This often leads to consumers not being able to afford life cover when they need it most.”