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1.Recently, the New Zealand Government altered the way life insurance companies are taxed. In brief, the change, which takes effect from July this year, will increase the tax that insurers pay on the profits that they make from life insurance sales. The result of this change is that New Zealand life insurance premiums are likely to increase in 2010. No one knows what the exact increase will be, however an increase is extremely likely, and figures of around 20-30% have been suggested by industry commentators. Based on most interpretations of the change, new policies set up after the change takes effect will have higher premiums immediately (so a plan set up the day after the changes occur will cost more than if the same policy were set up today). On the other hand, policies that were set up prior to the change will be likely to have a period of time (perhaps 5 years) before they are subject to the full increase. Also, some policies will not increase at all - many level life insurance plans have premiums that are guaranteed to remain totally constant - which makes these options very attractive to people looking for long term cost certainty in their life insurance. Because the increase is going to be on policies taken out after the change is made, there is an opportunity to start life insurance now, and save yourself money over time. So if you’re considering getting life insurance in the coming years (for example you’re planning to buy a house or have a child), or if you’ve been meaning to get life insurance but haven’t gotten around to it - do yourself a favour and set up cover now. Also if you already have existing life insurance.
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