Guaranteed Rates

You will usually pay for your cover on a monthly basis. There are two methods in which this premium can be paid, either on guaranteed rates or reviewable rates. Reviewable means that you pay a set amount for your cover for the first five years. Thereafter the insurance company can increase (or theoretically also decrease) your premium based on their overall claims experience. This is derived from the number of claims they have paid out and the prediction for future claims. Reviews normally take place every five years, however they can be annual. Reviewable rates effectively put the insurance company in charge of future premiums-an 'open cheque book' approach. Guaranteed means that you pay a set amount for your cover over the duration of the plan (usually to age 60). This rate can never change regardless of how many claims you have or the company has in general. Based on these facts, you may wish to consider guaranteed premiums.