When is this option available?
Furthermore, there may be age restrictions on when this premium structure is available to you, for example, you may be required to be older than 35.
Hybrid Premiums, also referred to as ‘Optimum Premiums’ is a mixture between stepped and level premiums. Your policy goes from a higher than normal stepped style premium to a level style premium. Hybrid premiums have only recently been introduced as a third premium option and are currently only made available by two insurance companies in Australia.
Furthermore, there may be age restrictions on when this premium structure is available to you, for example, you may be required to be older than 35.
As hybrid premiums are a combination of both stepped and level premiums, they blend elements of both.
Advantages | Disadvantages |
Cheaper than level premiums in the short term. | More expensive than a classic level premium in the long term. |
Cheaper then stepped premiums in the long term. | Once a policy has been in place for several years, you may not be able to change unless you start a new policy again. |
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Comparing stepped vs. level premiums is an important step in determining which policy best suits your needs and those of your dependents.