Australian Life Insurance

Buying life insurance is a bit like taking out the garbage — no one really wants to think about it until it has caused enough of a stink to grab your attention. So, to save you the pain and complexity of another necessary chore, here is a simple breakdown of your options.

Types of Life Insurance:

Term Life Insurance – This type of insurance provides coverage to the insured for a pre-designated period of time. If you outlive your insurance, you may either discontinue the insurance, or pay a premium which will increase annually.

If you do not outlive the insurance, the beneficiary will receive the payment allotted by the insurance. This type is generally accepted to be the most cost-effective way to assure that your family is financially stable in your absence.

Disability Insurance – Also called disability income insurance, this form is an insurance of your income. If the insured is sick, injured, or otherwise disabled to the extent that a stable income is impossible, the insured will earn paid benefits. These benefits vary by the provider and extent of disability, and include paid sick leave and short- and long-term disability.

Total and Permanent Disability Insurance – In the event that the insured becomes totally and permanently disabled, and can no longer work steadily, this insurance provides life-long support. A lump sum form of insurance, unique to Australia, has distinct benefits not included in other types of insurance plans. A lump sum is received in one payment, directly after the need has surfaced, or once the insured becomes disabled. Other benefits are paid monthly over a given period of time. Though the lump sum is typically less money than the total of payments received over time, it can be invested and can grow to a greater sum.

Superannuation – In Australia, superannuation is a pension program with which employers are legally obligated to comply. Employers are required to pay 9 percent of an employee’s salary into this fund. It is accessible by the employee upon retirement. Finally, your hard work will pay off, even if you do have to wait until you retire to get your fair share.

Once you know the basics of insurance and have determined which program would work best for you, all you really need is a few numbers to call. The insurance provider can guide you the rest of the way, and with your newly acquired knowledge, you won’t be mislead.