Life Insurance – Forbes Advisor Australia – Forbes


One of the primary reasons that people take out any kind of insurance is for peace of mind. And life insurance is no different. 
While it is designed to help the family of someone after they have passed away, it is often most useful when the loved one is alive. For many, the thought of their family and loved ones struggling to make ends meet is too much to bear, and life insurance can help put these fears to rest.
So what is it exactly? A life insurance policy provides a lump-sum payout to you if you become terminally ill, or to your family when you pass away. Some of the major life insurance providers in Australia include MLC, AHM, Allianz and AAMI.
It’s peace of mind knowing that the bills will be covered and the people you care about will not be financially disadvantaged, giving them one less thing to worry about during a stressful and distressing time.
Most of us don’t like to think about death or terminal illness, but it’s important to ensure you’re adequately covered when you take out life insurance so that you have the right policy in place for you and your family.
Before considering taking out life insurance, the first step is to understand how it works. Life insurance covers death by any cause, although suicide is usually excluded for a set period of time of the policy. A pay out to family will normally occur if the death is related to an event such as:
There are a number of different types of life insurances to suit your personal circumstances. The main ones include:
There are a number of reasons people seek out life insurance coverage.
Do you have family members or dependents that you look after financially? Regardless of who your dependents are: children, a spouse or even your parents who you support,  life insurance is assurance that they will be provided for financially, if something were to happen to you.
Are you a sole trader or the main breadwinner? You may wish to protect your business to ensure it survives.  You can choose a business-owned life insurance policy with a disability insurance that names the business as the beneficiary so it can continue if something happens to you.   
Or, if you work in a high-risk area, you may want to consider a disability insurance that continues to pay you a wage, should you find yourself unable to work due to injury.
Did you know that you may already be covered through your superannuation fund?
Before you go any further, it’s worth checking if your super fund already includes an option for life insurance. To find out what insurance you have in your super fund, and who the insurer is, you can call your super fund or access your super account online. Check your super fund’s annual statement and the product disclosure statement (PDS).
It is also important that you ask:
In addition to looking at reviews and receiving word-of-mouth recommendations, it’s worth considering the following when taking out life insurance:
While most insist that life insurance is not as expensive as most people assume, at the end of the day you’re the one who has to be happy with the price. Make sure you’re aware of what the monthly premiums will be and whether or not they will rise in the future. It’s natural that they will rise as you age, but make sure you’re financially comfortable with these hikes. People either opt for ‘stepped premiums’ that are recalculated on an annual basis (usually at a higher level) or ‘level premiums’, which are higher to begin with, but then price increases happen more slowly as they are not indexed to age.
Like most forms of insurance, waiting periods apply in certain life insurance products, especially income protection. Check your policy to determine the waiting period for different types of life insurances and shop around for a policy with a low wait time, as they can range from a handful of weeks to many months.
All policies feature exclusions of some kind and typically life insurance doesn’t cover suicide or any risky activities or behaviours. Read the fine print carefully, as it may surprise you what falls within these exclusion definitions.
Life insurance claims can be lengthy and stressful. This is where independent online reviews can be very helpful, so make sure you look for companies that place a premium on good customer service and speedy claims processing.
Do you get a discount if you have multiple insurances with the company? Does it offer cover of more than two million dollars? (Most top out at this range). Is the policy underwritten by an insurer you can trust? All of these additional features can be taken into account when deciding on the best life insurance policy for you.
Before you purchase a life insurance plan it is important to shop around to make sure you get the cover that suits your circumstance.   
A broker could be a good place to start. Their job is to represent consumers in their search for the best coverage from several different insurance companies in exchange for a commission.
Or perhaps you can go direct? If you have the time and the patience, you can shop around yourself and go directly to a life insurance provider. Now that you have a better understanding of the questions to ask and the tools at your disposal, you are well-placed to find a policy that suits your needs.
This really depends on your circumstances. If you have dependents who rely on you financially—or you have debts that would be burdensome for your family if you died— then life insurance may indeed be worth it. It’s peace of mind financial protection. As with any financial decision you need to weigh up your situation with the policy to make sure it is worth your while. Of course, the older you are, the higher the premiums are likely to be.
. Some insurers do require you to complete a medical check, especially if you are older. This will likely involve a series of questions and a blood, saliva and urine test. A physical medical health check, however, is not always required in order to obtain life insurance. Instead you will be asked about your medical history, including your current health status, and your family history, alongside any medical conditions, treatments and details of your physicians
Yes, you can apply to increase your cover. If you have taken out a life insurance policy but want to increase it, then contact your insurance provider. Be aware that physical checks may be required if you’re seeking a higher level of cover, and, of course, premiums are likely to rise. You can also increase your cover through your super fund.
Generally yes, if your cover has been in place for some time. Any claim will be assessed on your individual health situation, lifestyle and occupation activities, and your policy documentation that you hold with your insurer. To be certain, it is wise to check with your provider.
Your insurer will ask about your medical history, your past and current prescriptions, your family’s medical history (parents and siblings), your driving record, as well as your hobbies and work. Why are they interested in your hobbies? It makes all the difference to your risk profile whether or not you love indulging in extreme sports on the weekends.
To make a claim on your insurance, speak to the person or the company you bought the policy from or a broker if you used one.
There are some situations where you can take out money from your policy. This depends on the insurance plan and how long you have held it and how much contributions you have made. Speak to your policy provider to find out if you can withdraw and how much, as every policy is different.
According to insurer NobleOak, if you are a 35-year-old non-smoking male, you would pay around $30/month for cover worth $500,000. If you are a 35-year-old non-smoking female, you would pay approximately $25/month for the same cover, as women have a lower mortality risk. Naturally, this is just one insurer and there is a range of things that impact the price of life insurance cover, including your age; the level of cover you are seeking; your overall health, as you could pay more if you have a pre-existing medical condition; your family medical history; your lifestyle, as smoking and drinking too much alcohol can also increase your premiums; and your occupation, as if your job is higher risk, you’ll pay more for cover.
Essentially brokers receive a commission from the life insurance provider when they recommend a product. Insurance brokers are currently exempt from a ban on “conflicted remuneration” as part of the Future of Financial Advice (FOFA) reforms a decade ago, but, more recently, the Federal Government’s Quality of Advice Review is looking into the possibility of removing commissions altogether. In any case, check if your broker is licensed (they need to be), and ask them to disclose their commission and how their commission is structured. They should also be able to offer you a wide range of insurance policies rather than just a handful from a few select providers.
It depends on which kind of insurance you are talking about and the individual policy. Generally speaking, however, life insurance expires at the age of 99, while trauma insurance expires at 70 years of age. Meanwhile, total permanent disablement (TPD) insurance ends at 65.


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