Pros and cons of fixed life insurance premiums

More often, people choose life insurance cover without fully understanding the difference between fixed and escalating insurance premiums. Knowing the contrast can help you choose cover that best suits your needs.

Taking the time to do your own research and also understand how fixed premiums work can lead to long-term savings.  Bromfield says “Avoid choosing escalating premiums merely because this is the most popular option offered by providers,” as he unpacks the pros and cons of fixed life insurance premiums:


  • The premiums are fixed, giving consumers assurance that they will be able to afford payments in the future.
  • Fixed premiums give you more control over your budget.
  • You benefit from long-term costs savings as the premiums remain the same even as you age.
  • The premium cost breakdown is easy to understand.
  • The premiums don’t increase annually and offer protection against rising inflation.


  • The premiums are expensive at the beginning, but remain the same for the duration of the policy.
  • It can be difficult for young adults who are just starting out in their careers to get this type of premium due to the high costs.
  • The policy is not flexible. It doesn’t offer an option to increase or decrease premiums.
  • The sum insured remains the same for the duration of the policy.
Being aware of the difference between fixed and escalating life insurance premiums will help you avoid making costly mistakes. Life insurance companies often include a premium escalation as the default option, so it is worth reviewing your policy to check if you already have one.
— Lee Bromfield, CEO of First National Bank Life

“In tough economic circumstances, affordability is key when making financial commitments, therefore being informed will not only help you to choose the right type of premium, but further ensure that you are covered for the duration of the policy,” concludes Bromfiel