Step 1: Decide What Kind of Life Insurance You Want
Gone are the days when life insurance was simply a way to pay your family a lump sum when you pass away. These days there are dozens of types of life insurance on the market, from your basic term life insurance through to TPD, income protection and trauma insurance.
An overview of all the types of insurance on the market would take days to read, so we’ve written a brief guide to the four main types of life insurance Australians need:
Term life insurance:
This type of life insurance will provide a lump sum benefit to your nominated beneficiaries if you either die or are diagnosed with a terminal illness (your diagnosis states you have 12 months or less to live). Australian term life insurance policies are usually available in stepped or level premium formats. A stepped policy means that you will pay a reduced premium now that increases significantly over the life of your policy (as you get older).
A level premium, on the other hand, beings at a relatively higher rate now yet remains at that level for as long as you hold the policy, barring occasional company-wide premium increases that can occur as a result of changing risk profiles. As advisers, we generally recommend a level premium, as if you can afford it now this structure will save you a considerable amount in the long run. However, everyone’s insurance needs are different, so we recommend you consult an adviser before making such a decision.
Who needs it:
Generally, everyone. If you’re young and single, term life insurance will cover your funeral expenses and any debts you’ve incurred. If you’re older and have a family, it will help pay off your mortgage and the cost of running a household and caring for your children. The amount of insurance cover you require will depend on your personal and financial circumstances; we therefore recommend contacting an adviser to determine the best course of action regarding your insurances.
Income protection insurance:
This insurance is designed to pay you up to 75% of your monthly income if you find yourself suddenly unable to work because of an unexpected illness or injury.
Who needs it:
Income protection is worthy of consideration from anyone. We all have ongoing costs that require an income stream from somewhere, to put food on the table and shelter overhead at the least. In the event of your disability, a benefit payment of up to 75% of your regular income can provide you with the ability to maintain your current standard of living, as well as help out with any ongoing medical costs that may arise from your disability.
Total and permanent disability (TPD) insurance:
This type of insurance will pay you a lump sum benefit if, because of sickness or an accident, doctors advise you that you’ll never be able to work again. TPD insurance can cover you for never being able to work your “own” occupation, or “any” occupation, depending on the level of cover you choose. It can be bought on its own or in addition to a life insurance policy.
Who needs it:
Anyone who does not have the savings or assets in place to support themselves and/or their family should they no longer be able to work. People whose professional skills are highly occupation specific are particularly in need of TPD insurance.
Trauma insurance:
Also known as “critical illness insurance”, this type of insurance will pay you a lump sum if you are diagnosed with one of the traumatic medical conditions covered by the policy. These conditions can include cancer, heart attack, a stroke and more. This will be paid to you regardless of whether your ability to work is affected by the illness, and often times you can still receive this pay out in conjunction with a TPD or income protection benefit.
Trauma insurance is usually employed to cover the medical costs of one of the covered conditions over and above what is covered by your private health insurance.
Who needs it:
Anyone who wants to be fully covered in case of being diagnosed with a critical medical condition. If your working status excludes you from being eligible for income protection insurance, trauma insurance may be a better option for you.
Can I get a combined policy that includes one or more of these types of insurance?
Yes! We specialise in tailoring your policy to suit you and your family’s needs. Just let us know which types of cover you’re considering and we’ll do the research and find the insurer that will offer you the best value for money.
Doesn’t my superannuation fund offer me life insurance and/or TPD cover?
Many superannuation providers include life insurance and/or TPD cover in their policies. However, the benefits that superannuation based policies pay may not be enough to meet your individual needs. Further, there may be conditions of release and other limitations such as narrower policy definitions that can impede upon your ability to receive a payout to from insurance offered by large superannuation funds. As an advisory group, we generally recommend that any life insurance cover needed is obtained from reputable and specialised insurance companies, and that our clients do not rely simply on generic superannuation fund cover.
Handy hint: when calling to discuss your insurance options, have your Product Disclosure Statement handy. Your insurance adviser will then be able to help you determine what your superannuation insurance covers and if this will pay a large enough benefit.
What’s the difference between trauma insurance and health insurance?
Generally speaking, health insurance will cover part of your medical expenses. However, illnesses usually come with a host of other expenses including ongoing treatment, rehabilitation equipment, specialist therapy, and loss of income. Trauma insurance is designed to provide additional cover so that you’ll be able to take care of all the expenses that come with an illness.
One potential scenario is that you’re unlucky enough to be faced with a serious form of cancer. The services of a leading specialist may be expensive, and may potentially not be covered by private health insurance. A trauma payout would allow you to, say, fly to Zurich to meet with a specialist considered to be an expert in her field. Trauma insurance can provide you peace of mind that you will have the best chances of recovery should you find yourself suffering from one of the many conditions specified under your policy.
Step 2: Choose Your Insurer
Getting a life insurance quote is easier than ever. You don’t even have to pick up the phone!
To get an idea of the cost of cover, simply use our live online quote calculator. All we need to know is:
- The types of cover you’d like
- The amount of cover you are interested in
- A few personal details (age, gender, smoking status and occupation)
Alternatively, if you’d prefer to speak to a real person you can just fill out our “Get A Quote” section and one of our expert advisers will call you to discuss your coverage options.
Who Are Our Platinum Partners?
When it comes to life insurance, the cheapest policy is not the best policy. After all, there is no point in paying premiums only to find out that you don’t have the coverage you need. At Cover Australia we have partnered with the four major life insurance providers that:
- Our research has shown provide the best value coverage
- Provide us with the facilities and service that allows us to advise our customers throughout the life of their policy
- Have a track record of honesty, reliability and high quality products
Click to find more about each of our partners:
If you’d like more information about our Platinum Partners, click here to read their individual letters of promise.
Step 3: Apply For Your Insurance
Applying for life insurance is an easy, straightforward process. Below are a few common questions about applying for cover:
What are the basic requirements of the different types of insurance?
All policies offered by Cover Australia require you to be an Australian citizen or permanent resident. In addition, each type of insurance has its own set of basic requirements:
Term life insurance:
- Applicants need to be aged 16 – 65 years old
- The insurer’s health, lifestyle and family medical history must be met
Income protection insurance:
- Applicants need to be aged 19 – 60 years old
- Applicants need to be working a minimum of 20 hours per week in their primary occupation for at least a year before the policy commences. Or, if self-employed, applicants must have been working in that position for at least 2 years prior to the commencement of the policy.
Trauma insurance:
- Applicants need to be aged 15 – 65 years old
Do I need to get a medical to be eligible for life insurance?
No. Not all life insurance policies require you to get a medical examination before you get coverage. However, as a general rule, policies that don’t require medical examination before approving your application will have higher premiums than those that do.
Step 4: Make a Claim
Unlike most life insurance comparison websites, Cover Australia aren’t just here to help you choose the insurer that’s best for you; we also offer ongoing support if and when you need to make a claim.
Our office is licensed to handle your claims from the initial claim through to the day you are paid out, and we have over 35 years of industry experience. This means that, with us, you’ll be able to get the money you need as quickly as possible, so you don’t have to experience any extra stress and hardship.
Making a claim involves:
- Completing a claim form and returning it to your insurer for assessment
- Making sure you lodge your claim within the time frame specified in your policy
- Providing any additional information the insurer requires. This could include the results of medical testing, statements from medical professionals, or answers to specific questions.
What sort of waiting periods apply?
Having a period of time you must wait before you can make a claim on your policy is standard within all types of insurance.
How long your waiting period will be will depend on the type and level of cover you have.
As a general rule, a minimum 90 day waiting period applies after the policy becomes active before you can claim on most types of life insurance.
Can I make a claim if I am overseas?
Yes! All of our insurers provide worldwide coverage, 24 hours a day, 7 days a week, 365 days a year.