Life Insurance Policies

Life insurance policies are designed to protect Australian families from the financial impact of losing a member of the household.  They are also used in business to protect the company and its shareholders from similar financial impacts of losing a key person in the business.

A number of different life insurance policies have been available over the years, however the most popular type of cover today is term life insurance.  This type of policy covers the insured person for a specific term.  Generally this runs through to age 99, provided that the premiums continue to be paid.

When taking out life insurance policies, there are a number of factors to be considered:

 Sum Insured

Each life insurance policy has a set value, which is known as the sum insured.

The amount required varies depending on the person’s own needs and objectives, but most life insurance policies will be sufficient to clear the person debt and provide a financial buffer for their family.

Calculating the sum insured is one of the most important considerations when taking out life insurance policies, so it is worth sitting down with your family to work out exactly how much would be required in your family’s time of need.

Insurance Providers

There are a number of insurance companies offering life insurance policies in Australia.

Whilst life insurance policies don’t vary greatly from one insurer to the next, it is worth reading through the policy documentation to ensure you’re getting a policy that is going to meet your needs.

When selecting an insurance provider it is also important to consider the cost of their life insurance policies.  Premiums can vary greatly from one insurer to the next, so it is definitely worth the effort in finding the insurer that will provide the best value premiums for your needs.

Extra Features & Benefits

Whilst the standard cover is fairly similar from one insurance provider to the next, one area where life insurance policies can differ is with the extra features and benefits.

Some life insurance policies include extra benefits such as accidental injury benefit, which pays you a percentage of your sum insured for certain injuries, and financial planning benefit, which provides an additional allowance for your family to obtain professional advice on how best to use the proceeds from your life insurance policy.

Additional Covers

Most life insurance policies can have other types of insurance bundled in.  These can include TPD insurance, which pays a lump sum if you become totally and permanently disabled; trauma insurance, which pays a lump sum upon diagnosis of a terminal illness; and income protection which pays a monthly benefit if you are unable to work due to injury or illness.

Choosing Life Insurance Policies

There are many factors to take into account when looking at life insurance policies and determining which policy is right for you and your family.

Ultimately you want a policy that is going to meet you and your family’s needs in terms of the sum insured, and one that has all of the features and benefits that you need whilst still offering a premium that provides good value for money.