Hybrid premium

Hybrid premiums are a combination of stepped and level premiums. They are a new form of premium and not all insurers will offer this premium structure. The premium will generally start off as a stepped premium then will convert to a level premium when the stepped premium amount would exceed the amount of the level premium. When the life insured turns 65 or 70 the premium structure will then resume a stepped premium structure.

Advantages

  • Is a more affordable premium structure than a level premium;
  • Remains cheaper than a stepped premium in the long term; and
  • It combines the advantages of a stepped and level premiums.

Disadvantages

  • You may pay more for your policy if you hold the policy over a long period of time compared to a level premium.

Why a hybrid premium is recommended

  • You intend on holding your insurances over the long term, however cannot afford the initial cost of a level premium.
The Dover Group