Compare Life Insurance Companies

The task of finding an acceptable life insurance policy can seem overwhelming.  Before you can even compare life insurance policies, it is helpful to understand the terminology.  Here is a list of terms to get you started…

Term Life Insurance

A term life insurance policy pays out a death benefit only if the person covered dies during the specified term.  For example, if you take out a term life insurance policy you might take it out for ten years, or it might be dependent upon the insured individual becoming a certain age.  You cannot cash out a term life policy; instead, the policy pays a lump sum to any dependents upon death.

Product Disclosure Statement (PDS)

This statement describes the life insurance policy.  It will let you know what the benefits are, what the limitations are, and what the costs and fees for the product are.

APRA

APRA, or the Australian Prudential Regulation Authority, is the supervisory body for life insurance companies that have been registered under the Life Insurance Act of 1995.

You can look up more terms you will run into during your comparisons in our Life Insurance Glossary.

Before Comparison Shopping

Before you compare the different life insurance policies, you should first determine how much life insurance cover you need to cover any debts and also leave enough funds for loved ones, if you are in doubt a financial adviser can help you determine this amount.

What to Look For

Naturally, the first thing you are going to compare will be the policy rate.   Don’t let a low rate be your only deciding factor.   You want to make sure you will have enough of a benefit to cover your family’s living expenses in case of your death.  Speak to a financial adviser to ensure that you are covered for the correct amount – especially if your family is dependent upon your income.

If you are choosing term life, you will want to look for a good balance between your premiums (monthly payments) and your death benefit.  In addition, you will want to find out how long the insurance will cover you for.  What might sound like a good deal may quickly sour if you find that the term covered is only five years.

Finally, you should find out what is covered and what is not covered in the policy which suits you.  Most policies will not cover suicide (so, get that get-rich quick idea out of your head now).  Some will cover death after a long illness, but some will only cover accidental death.   Make sure you understand what you are getting into before you sign the contract.