Facts about Term Life Insurance in Australia

Facts about Term Life Insurance in Australia

When you begin looking for life insurance in Australia you need to know the facts. Australia no longer offers whole life insurance with an investment component and the most popular remaining type of life insurance in Australia is term life insurance. This means, should you pass away during the term coverage your family or beneficiaries should receive the face value of the policy. This helps them cover the expenses of your funeral and anything else they might need the money for.

When can Life Insurance be Purchased?

Typically, term life insurance in Australia can be purchased when you are between the ages of 15 and 79. Term policies in Australia actually last your entire life as long as you continue to pay the premium to the life insurance provider. Your life insurance tends to renew every year and at that time your rates can change in line with inflation. Non-supernation life insurance policy can last until you are 99.

When Does the policy Pay Out?

In Australia, term life insurance pays out on your death or in the event of a terminal illness. This is what makes purchasing a policy later in life appealing as well. You can help protect your family against your medical costs and use the term life insurance money to cover such costs should a terminal illness befall you. You should be sure to read the life insurance contract thoroughly so you know that your policy contains a terminal illness rider and what the requirements are for using such a rider.

How Much Life Insurance Should You Get?

You must weigh the cost-benefit of life insurance. Term policies have much lower rates than the former whole life insurance policies but you could be paying into something that is never used. You should consult an accountant to help you determine the cost and the benefit of such policies. You want to make sure you are leaving enough behind for your family, but you do not want to pay such a high premium that you are hurting your current income. You also need to look at your long-term investments. It might be more important to have a large policy when you are young because you haven’t built a very large portfolio. As you get older, if you have invested well, a smaller policy might be in order just to protect outstanding debts or your home.

Cost Factors of Life Insurance

Your term life insurance policy in Australia will vary in cost based on many factors. Some of the basics are your age, gender, and how much coverage you are purchasing in the life insurance policy and your existing health. This is a way for the insurance company to assess the risk of payout and the overall cost of the life insurance to the business. If you wish to get a quick life insurance comparison in Australia – please fill out the form on this page or call 1300 793 143 for a chat with our insurance adviser.

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