When Insurance Starts to Feel Unaffordable

Insurance is one of those things we put in place with the best intentions.

We take a long term view. We protect our income, our families, our future plans. And at the time, the cover usually feels manageable and well thought through.

But life rarely stays the same.

If you ever find yourself questioning whether your insurance is still affordable, the most important thing to know is that you are not alone and you are not stuck.

There are often options available. The key is understanding them and having the conversation early x

How Premiums Work

One of the biggest factors affecting affordability is how your premiums are structured.

Most policies are set up with stepped premiums, where the cost increases each year as you get older. This keeps the starting cost lower, which is why it is the most common structure.

Another option is level premiums, where the cost stays relatively stable for a chosen period or until a specific age. The starting premium is higher, but over time it can often work out cheaper and easier to budget for.

It is also important to understand the difference between what you pay and the value of your cover. 

Some policies increase the cover amount each year with inflation, which can also affect premiums. Your adviser will help you understand how this works for your individual situation.

If Your Circumstances Change

Sometimes affordability issues are temporary, such as parental leave, redundancy or a change in income.

In these situations, some insurers allow you to suspend your policy for a period of time, often between six months and two years. This can help reduce financial pressure while keeping your cover structure in place.

There are conditions involved, so it is always important to talk through the details first.

Before Cancelling Your Cover

Cancelling insurance can feel like the easiest option, but it is a decision worth thinking through carefully.

If a policy is cancelled and you want cover again later, you will need to apply again and provide updated medical information. Because insurance is based on your health and circumstances at the time the policy begins, the pricing, exclusions or even availability of cover may be very different in the future.

That is why we always recommend speaking with your adviser before cancelling. There may be other adjustments available.

Missed Payments and Policy Lapses

If payments are missed and the insurer has not heard from you, a policy may eventually lapse. This usually happens after several missed payments.

If this occurs, the best step is to reach out early. Many insurers offer catch up payments or payment plans to bring policies back up to date.

The Most Important Thing: Talk to Us

If your insurance ever starts to feel unaffordable, reach out.

We are not here to judge. Our role is simply to help you understand your options so you can make informed decisions with the least impact on your future protection.

The earlier we are involved, the more options there usually are.

A Note on How Advisers Are Paid

Advisers are paid commission by insurers when policies are put in place. If a policy is cancelled or significantly reduced within the first two years, we are often required to repay that commission.

We do not charge advice fees, so this commission supports our team and the ongoing service we provide. That is another reason we always encourage a conversation before cover is cancelled, as there may be other solutions available.

If your circumstances have changed or your cover is starting to feel difficult to manage, reach out.

A quick conversation could make a big difference to the options available to you now and in the future.

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