Rate for Age Premiums
Most life insurance policies in New Zealand are issued on a Rate for Age basis, and all premiums quoted on the KiwiCover website are on a Rate for Age basis.
This means that your premium will change each year on your policy anniversary date, based on your age at that date. The premium applied at any given age reflects the assessed risk of a claim at that age based on actuarial analysis. Rate for Age premiums generally increase each year, but premiums for Life Cover can decrease at certain ages (Premium rates typically decrease each year from about age 20 to age 30).
Level Premiums
Unlike Rate for Age premiums, Level premiums remain fixed for a specified period, for example, Level for 10 Years, Level to Age 65 and Level to Age 80.
Level premiums spread the cost of cover over the level period, with some discounting for the time value of money. Level premiums are usually much higher than Rate for Age premiums in the earlier years because you are effectively paying upfront for future risk.
At the end of the level period, if the insurance benefit does not expire, the premium converts to Rate for Age.
Examples
Below are some examples of Life Cover premiums at various ages for comparative purposes.
The following premiums are for illustrative purposes only and are based on AIA’s standard premium rates as at 1 April 2020, including AIA’s standard policy fee, but excluding any discounts (e.g. Multi-Benefit Discount). Individual premiums may vary if a premium loading has been applied. Availability of cover is subject to underwriting and approval by AIA.
Fortnightly Premiums for Life Cover of $500,000
| Male, Non-Smoker | Age at Policy Issue | |||||
|---|---|---|---|---|---|---|
| 20 | 30 | 40 | 50 | 60 | 70 | |
| Rate for Age (first year only) | $24.71 | $17.54 | $20.82 | $50.23 | $158.52 | $601.44 |
| Level for 10 Years | $22.32 | $17.70 | $29.47 | $83.22 | $294.65 | $1,088.63 |
| Level to Age 65 | $33.25 | $36.22 | $55.51 | $109.39 | N/A | N/A |
| Level to Age 80 | $42.81 | $49.77 | $72.07 | $155.37 | $452.04 | $1,059.40 |
| Female, Non-Smoker | Age at Policy Issue | |||||
|---|---|---|---|---|---|---|
| 20 | 30 | 40 | 50 | 60 | 70 | |
| Rate for Age (first year only) | $16.01 | $12.34 | $17.86 | $41.43 | $117.54 | $382.44 |
| Level for 10 Years | $14.26 | $13.73 | $24.77 | $65.74 | $195.63 | $652.86 |
| Level to Age 65 | $22.17 | $27.40 | $43.37 | $86.25 | N/A | N/A |
| Level to Age 80 | $27.58 | $36.87 | $51.41 | $113.74 | $307.32 | $728.15 |
Please note that we are unable to provide you with any financial advice as to which premium type you should choose.
Quotes
If you would like a quote on a Rate for Age basis, please get a quote online.
If you would like to apply for a policy with Level premiums, please contact us with specific details of the type of cover you wish to apply for, the amount of cover and your preferred level period.
The maximum level period for Family Protection, Critical Conditions, Progressive Care, Income Protection, Redundancy, Total Permanent Disablement and Waiver of Premium insurance is Level to Age 65. Level to Age 80 is only available for Life Cover.
Private Health insurance is only available on a Rate for Age basis and you can get a quote online for this cover.
