Your Guide to Buying Life Insurance

We’ve compiled a number of life insurance guides to help you combat the uncertainties of dying too soon, being unable to work due to illness or injury or living longer than expected. Our Guides will help you determine what type of cover you require and how to get the best price.

Published November 24, 2016

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How important is a Life Insurance Policy?

Insurance, by its very nature, is a way of managing risks. In the case of life insurance, your life is the risk. Nobody likes planning for their death or for a debilitating accident or illness. However, accidents happen every day. You need to protect yourself from the financial losses that these accidents incur.

An introduction to buying Life Insurance

When you buy life cover, you want a policy which fits your needs without costing too much. It’s a good idea to ask a life insurance specialist or company to help you, like Life Insurance Direct. If one kind of policy doesn’t seem to fit your needs, ask about others or try using our quote index to compare different policies online.

This buyer’s guide provides only basic information. You can get more facts by speaking to one of our specialists when calling 1300 135 205 or filling in the below quote form.

At Life Insurance Direct we understand that life insurance can be a difficult subject to understand. To make things easier for you, we have put together a number of life insurance guides which will help you as you go through the comparison process with us.

Your first step to buying life insurance is to decide how much you need, how much you can afford to pay and the kind of policy you want.

Even if you do not have any of these needs yet, you may still want to consider purchasing a small “starter” policy, if you anticipate you will have these needs in the future. Remember, the younger you are the less expensive life insurance will be.

Above reasons should be based upon your financial planning needs. Factors such as your marital status, number of dependents and cost for their support, future education needs, current and anticipated family income, and your current assets and debt obligations all play an important role in determining the amount of life cover that’s right for you.

Choosing the Amount

In general, the more protection your life policy offers, the higher your premiums. When determining how much life cover you’ll need, figure out how much cash and income your dependents would have if you were to die today, and the amount they would actually need to maintain their current lifestyle. Your chosen policy should come as close to making up the difference as you can afford.

Think of life insurance as a source of cash needed for expenses such as illnesses or injuries and for paying taxes, mortgages and other debt.

Single with no dependants

Your priorities will be for healthcare planning, investment, savings, retirement and disability planning.


Healthcare planning, estate death and disability planning, investment and savings planning, maintenance and education protection for your ex-partner and dependents.


Focus on healthcare planning, estate death and disability planning, investment and savings and retirement planning


Your priorities will shift to only include healthcare planning, income and estate planning.

We make it easy for you to compare policies online with our powerful comparison engine.

Buy with confidence today for peace of mind tomorrow.

Choosing the Appropriate type

Once you figured out how much coverage you’ll need, you should think about the best kind of policy to meet your requirements.

Typically, the main type of life insurance available in Australia is Term Life Insurance. With term insurance you get protection for a set period. It pays the sum insured only if you die or become totally and permanently disabled during this period. If you want cover for your mortgage, which typically lasts 25 years, and give your family a financial safety net, then term insurance is what you want.

Some term insurance policies are “renewable” for one or more additional terms even if your health has changed. However, your premium will normally increase with each renewal, because of your increase in age. It’s important that you check the premiums at older ages and the length of time the policy can be continued for.

Premiums are paid either annually or monthly in exchange for protection against certain risks. Many insurers place other types of personal insurance under the life insurance umbrella. These include:

Trauma Insurance

Also known as critical illness insurance, pays a lump sum benefit upon diagnoses of a critical illness.

Total and Permanent Disability Insurance (TPD)

Pays out a lump sum benefit if you become totally and permanently disabled and it’s unlikely that you will even be able to work again.

Income Protection Insurance

Cover up to 75% of your salary should you be unable to work due to sickness or injury.

Funeral insurance

Provides a lump sum benefit to help you pay for the cost of a funeral or other related expenses upon your death.

Finding an affordable policy

An insurance policy is only as good as the company that backs it. You want to make sure you choose a company you can rely on to be around for as long as you’ll need coverage. That’s why it’s important that you compare similar policies from different companies to find which one is likely to give you the best value for your money.

Finding insurance is not easy and a simple comparison is not enough. There are other things to consider. For example:

Remember, no one company offers the lowest cos at all ages for all kinds and amounts of insurance. It’s important that you shop around first. Speak with a specialist advisor at Life Insurance Direct about your options.

At Life Insurance Direct we understand that life insurance can be a difficult subject to understand. To make things easier for you, we have put together a number of life insurance guides which will help you as you go through the comparison process with us.

Get an instant Life Insurance quote

Or call us on:

1300 135 205

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