Is COVID affecting life insurance premiums?

Ask the Experts
1

Question: My wife and I hold life insurance policies with Zurich. This year our premiums have gone up by 77% and 81% respectively. I’m now 67 and my wife is 64. I’ve written to Zurich to ask for an explanation, but I really can’t cop the magnitude of the increases – is this a decision made overseas and based on fear of the impact of COVID?

Answer from CHOICE insurance expert and Data Analyst at Super Consumers Australia, Matthias Oldham: Insurance pricing is based on a range of factors, including age and rates of claim. The regulator has recently taken action against life insurers for creating unsustainable product offerings. The result has been price shocks such as the ones you’re experiencing. You’ve taken the right steps to get answers from your insurer about what led to the increases in your case. Modern life insurance tends to be designed to cover lost earnings when you are employed. As you near retirement it is a good time to assess the value of these products as they can be very expensive to maintain.

4 Likes
3

Yes indeed. In my house when the dependants departed and mortgages were paid life insurance was not renewed. I had the example of a neighbour, a youngish woman with 3 children, whose husband unexpectedly died of cancer, his insurance payout was critical to keeping them going through a very hard time. I know couples of much later years who are quite self-sufficient who could not tell you why they insured each other, its just habit.

5 Likes