Premium

In Australian insurance, a premium is the regular payment you make to keep your insurance policy active and maintain your cover. The premium amount is calculated based on risk assessment factors specific to you and the type of insurance. For life insurance, income protection, and TPD insurance, premiums are typically based on your age, gender, occupation, health status, smoking status, and the sum insured or benefit amount you select. Insurers use actuarial data and APRA (Australian Prudential Regulation Authority) guidelines to determine fair premium pricing. Australian tax laws allow certain insurance premiums to be tax-deductible, particularly income protection insurance premiums, which can reduce the net cost of cover. Premiums may increase over time due to indexation, age-based increases (for stepped premiums), or changes in your circumstances. Under Australian consumer law, insurers must clearly disclose all premium costs, including any fees or charges, in the Product Disclosure Statement (PDS) before you purchase the policy. You have the right to compare premiums across different insurers and negotiate or switch policies during the cooling-off period without penalty.