GUIDES & RESOURCES

Find A Suitable Life Insurance Policy

Finding a suitable life insurance can be difficult. With so many different insurance products to choose from, how do you find appropriate cover to suit your situation and budget?
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Here are some useful tips to help you find a policy that’s suitable for you.

Factors to consider before buying life insurance

Before you start comparing life insurance policies, consider the following factors.

How much cover do I need?

The amount of life insurance you buy will depend on your personal circumstances. Think about how much money your family will need to maintain its current standard of living, and what you can afford to pay right now.

The level of cover you choose will usually come down to finding the right policy for your needs, and your budget.

What type of life insurance is suitable for me?

There are four main types of life insurance cover available in Australia1. These can be purchased separately or bundled together under one policy.

Life Insurance – Term life insurance (or death cover) provides a lump sum payment to your loved ones if you pass away or are diagnosed with a terminal illness.

Trauma Cover – This insurance pays you a lump sum benefit if you’re injured or diagnosed with a serious illness that's specified in your policy.

Total Permanent Disability InsuranceTPD provides a lump sum payment if you suffer a serious illness or injury that leads to total and permanent disablement.

Income Protection – This insurance replaces lost income if you’re unable to work due to serious illness or injury. Most policies will provide you with a monthly payment of up to 75% of your total income2 for a set period of time.

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Do I need life insurance if I’m already covered through work?

If you’re already covered by your employer, you may not need to take out a new policy. However, you may need to buy additional cover. Check with your employer to find out exactly what your policy covers.

Key features to look for in a life insurance policy

Once you’ve worked out the type of life insurance you need, it’s time to focus on features. Here are some important things your life insurance policy should include.

Terminal illness benefit – A terminal illness benefit allows you to access funds from your life insurance policy if you're diagnosed with a terminal illness and have less than 12 months to live.

Advanced payment benefit – An advanced payment benefit provides your family with financial assistance of up to $30,000 paid immediately upon death to help with urgent costs.

Accommodation benefit – An accommodation benefit provides daily compensation if you have to stay over 100kms from your home, or if a family member has to relocate to take care of you.

Financial planning benefit - A financial planning benefit offers your family assistance if they need to employ a financial planner3 to help them create a long-term financial plan.

Cooling-off period – A cooling-off period allows you to opt out of your policy if you change your mind. This period usually lasts for 28-days after you receive your policy.

Waiver of premium - A premium waiver covers your life insurance policy payments if you become totally and permanently disabled or are retrenched from your job.

Premium Freeze – A premium freeze allows you to suspend your cover for a short amount of time if you're unable to make payments.

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How to reduce your life insurance premiums

Life insurance can be expensive, but there are some simple things you can do to reduce the cost of your premiums.

Reconsider how much cover you really need – If you’re on a budget, there’s no point buying more life insurance coverage than you need. A cheaper policy with fewer features may be sufficient.

Get healthy - Pre-existing medical conditions, smoking, and obesity impact on the cost of your premiums4. Improving your health will not only make you feel better but may also reduce the cost of your premiums.

Look for hidden fees – When you buy life insurance, there are often additional fees and charges hidden in the fine print. Ask your insurer to provide you with a breakdown of costs so you know exactly where your money is going.

Combine policies – Most insurers offer multi-policy discounts if you take out additional cover. Bundling your policies is a great way to save money and keep track of your policies.

Compare policies - The best life insurance companies aren't always obvious. A policy with a lower premium may not have all of the features that are important to you. Always shop around before signing on the dotted line.

How to compare life insurance quotes in Australia

Lifebroker compare offers from their range of life insurance providers and provide you with all of the information you need to make an informed decision.

Get a quick and easy quote online with their life insurance comparison tool, or feel free to call us on 13 19 20 and let one of our consultants help you find a policy that suits you.

Sources:
1. https://www.moneysmart.gov.au/insurance/life-insurance/
2. https://www.moneysmart.gov.au/insurance/life-insurance/income-protection/
3. https://www.csc.gov.au/Members/Advice-and-resources/Financial-planning/
4. https://www.aihw.gov.au/reports-data/behaviours-risk-factors/overweight-obesity/overview/

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