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Home >> Main Differences between Stepped Premiums and Level Premiums

Main Differences between Stepped Premiums and Level Premiums

Stepped Premiums for Income Protection Insurance Plans

Stepped premiums are considered to be beneficial in the short term basis mainly because this premium plan allows buyers to enjoy good interest rates for the first few months or years. However, buyers who opt for this premium plan will have to pay increased premiums as they grow older. Buyers who have decided to opt for stepped premiums should keep in mind that this type of income protection premium plan is ideal only for buyers who plan to take short term income insurance policies or buyers who are in their early to late 30s.

 

Levelled Premiums for Income Protection Insurance Plans

Levelled premiums are considered to be beneficial in the long term basis mainly because this premium plan allows buyers to pay the same amount of money to the insurer even after 10 years. This means that the buyer doesn’t have to worry about paying higher premiums when he gets older. Buyers who opt for levelled premiums usually know beforehand how much they have to pay every month and when payments have to be made.

 

Deciding Factors While Choosing Premium Plans

Buyers who are undecided on which type of premium plan should be selected should remember that levelled premiums allow buyers to plan for the future where as stepped plans allow buyers to enjoy short term gains. Both these plans have benefits hence, buyers should keep in mind their financial commitments and restraints before deciding if they want to pay levelled payments to the insurer or stepped premiums to the insurer.


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Income protection is a crucial part of any comprehensive financial plan. If you’d like some help customising the correct policy for you, or want to know more about the income protection insurance benefits.