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Understanding stepped premiums

How your choices influence the cost of your insurance

There are a lot of components that go into determining what type of insurance policy you need and how much you’ll pay in premiums to maintain your cover. It can be a highly personalised process, and that can make it tricky to understand why you might be paying a different amount to someone else.

To help you understand what you’re paying and why, we’ve broken it down into three categories: your personal risk factors, the type of insurance you choose and your premium structure.

1. Personal risk factors

During the underwriting process, we assess your history and lifestyle against a range of factors to calculate the possibility that certain life events may happen to you. The higher your level of risk for these factors, the higher your premiums are likely to be.

Here are some of the personal risk factors that can influence your premiums:

  • Age - some illnesses become more likely as you get older.
  • Gender - each gender has its own risk factors, so men and women generally pay different premiums.
  • Occupation - for example, working in a mine carries more risk than working as a retail assistant.
  • Health factors - a high Body Mass Index (BMI) can be an indicator of poor health.
  • Dangerous hobbies - for example, sewing is less risky than skiing.
  • Smoking - smoking increases your risk of illness and disease.
  • Medical history - hereditary factors, or conditions developed in your lifetime, can increase your risk of becoming ill or injured later in life.
  • Your home state - each state government taxes insurance transactions differently.


2. The type of insurance you choose

Your life insurance policy has been designed with a lot of different features that you can pick and choose from, so it fits your lifestyle and needs. Some of these features may increase the cost of your insurance:

  • Types of cover
  • The amount you’re insured for
  • Premium frequency (i.e. monthly or annually)
  • Waiting period before you can receive any benefits
  • Annual indexation to keep up with inflation


3. Your premium structure

Everyone’s financial situation is different. That’s why AMP Life offers different ways for you to pay your insurance premiums.

Stepped premiums

One way is to have your premiums stepped: in other words, reflecting your age and any risk factors that go every year at the anniversary of your insurance policy.

If you choose stepped premiums:

  • Your premiums may be less expensive when your policy starts, compared to other options.
  • The cost of your premiums will generally increase each year.
  • AMP Life can increase your premium if it re-prices the insurance product to ensure it can meet future claims from customers. You will be advised of this if it applies to your policy.

Find out more:

If you have any questions about your insurance:

Important information

AMP Life Limited ABN 84 079 300 379, AFSL No. 233671 (AMP Life), has proudly served customers in Australia since 1849. AMP Limited ABN 49 079 354 519 (AMP Limited) has sold AMP Life to the Resolution Life group whilst retaining a minority economic interest. AMP Limited has no day-to-day involvement in the management of AMP Life whose products and services are not affiliated with or guaranteed by AMP Limited. AMP Limited is not liable for products issued by AMP Life or any statements or representations made in the PDS for those products. “AMP”, “AMP Life” and any other AMP trademarks are used by AMP Life under licence from AMP Limited.

Any advice and information on this website is general in nature and is provided by AMP Life, which is part of the Resolution Life group. The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on the advice, you should consider the appropriateness of the advice, having regard to those matters as well as the relevant product disclosure statement (PDS), available from AMP Life at amplife.com.au or by calling 133 731, before making a decision about the product. Consider speaking to a financial adviser if you have any concerns.

If you decide to purchase or vary a financial product, AMP Life and/or other companies within the Resolution Life group will receive fees and other benefits, which will be a dollar amount or a percentage of either the premium they pay or the value of their investments. You can ask us for more details. 

AMP Life is part of the Resolution Life group and can be contacted on 133 731 or via the contact us page.