Guaranteed premiums in plain terms
With guaranteed premiums, the insurer promises not to change what you pay for the life of the policy. Your monthly cost on day one is your monthly cost in year twenty, unless you ask to change the cover. That makes budgeting simple.
Most term life insurance and critical illness cover sold in the UK today uses guaranteed premiums. The starting price can be a little higher, but you carry no risk of a rise.
How reviewable premiums work
A reviewable policy has review points written into the terms. At each one, the insurer looks at the cost of claims across all its policyholders, plus its own expenses, and may raise premiums for everyone on that product. Your own health is not part of the review.
The appeal is a lower starting price. The risk is that a rise comes at a time you cannot easily absorb it. Some people end up cutting their cover or cancelling, often when they are older and new cover would cost far more.
- Lower starting premium
- Premiums can rise at each review date
- Rises apply to everyone on the product
- Your terms explain how often reviews happen
Do not confuse reviews with increasing cover
Some policies increase the amount of cover each year to keep pace with inflation. Your premium goes up with it, but that rise is part of the design and you can see how it works in your documents. A review is different: it raises the price of the same cover.
Income protection policies sometimes come with age-costed premiums, which rise each year as you get older. That is another planned increase, and it is worth comparing with level options.
Choosing the right option for you
If you want cover for a long time, such as a 25 year mortgage or a whole of life policy, guaranteed premiums protect you from surprises when you are older. If you need cover for a short period and want the lowest starting price, a reviewable policy could make sense, as long as you understand the review dates.
Ask yourself what you would do if the price rose at the first review. If the honest answer is cancel, guaranteed premiums are probably the better fit.
How Hi Tomorrow explains your options
We tell you clearly whether each quote is guaranteed or reviewable, and when any review would happen. If you hold an older reviewable policy, we can look at whether switching to guaranteed cover is possible and worth it, keeping your existing policy in place until the new one starts.
We compare policies across our panel. Acceptance and terms are subject to the insurer's underwriting.