Top 10 Life Insurance Questions

We have put together a list of the top 10 questions we get asked about life insurance.

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number-1What does life insurance cover?

It pays a lump sum if you pass away or if you are diagnosed as being terminally ill. Which is generally defined as the life insured having 2 specialists confirm they have less than 12 months to live.

* It generally covers all deaths except for suicide in the first 13 months; however always check the PDS to be certain.

number-2Who receives the benefit from my policy?

You can nominate anyone you like to receive the proceeds from your policy. You may nominate a family member, friend, institution or charity or you can leave it to your estate.

While you will be asked to do this during your application, the policy owner can change this nomination at any time.

* Nominating 1-5 people to receive your benefit is the industry norm.

number-3How much cover can I take out?

In most cases, there is no limit on the amount of cover you can take out. If the level of cover requested is above a certain amount, you will generally need to financially justify the level of cover you want by providing further financial details to your insurer at the time you apply for the cover.

number-4Does my policy cover me if I am overseas?

The policies we compare do provide worldwide cover 24/7. However in some cases, if you have booked to go overseas or are planning to go overseas to a country which is deemed unsafe by the Australian government, your insurer may exclude cover from that country or place a general war & terrorism exclusion on the policy. In most cases, insurers will use the ratings provided by the Department of Foreign Affairs and Trade / Smart Traveller. When you apply for your policy, you will be required to disclose any trips that are planned or booked at the time.

* However, once the policy has commenced there is no requirement going forward to inform your insurer of overseas travel.

number-5What do you charge?

We do not charge any fees to our clients and offer a completely free service! We are remunerated through commissions we receive from insurance companies based on the policies we sell.

number-6Who should take out life insurance?

You may want to consider taking out cover if you:

  • Are Married
  • Have a mortgage
  • Have or planning to have children
  • Have any other financial obligations

number-7How much does a policy cost?

Your premiums will vary depending on a number of factors:

  • Gender
  • Age
  • State
  • Smoking Status
  • Your level of cover
  • Your premium structure
  • Your insurer
  • Pre-existing medical conditions
  • Pastimes

number-8Do I need to take out funeral cover if I have life insurance?

The types and number of policies you take out are entirely up to you.

* However it is important to note that most of the life cover policies we compare offer a ‘Funeral Advancement Benefit’ which pays an advanced benefit to your beneficiaries upon your death to assist them with the cost of your funeral and other related expenses.

number-9Can I get cover if I have had a serious illness such as cancer or if I have suffered a heart attack?

The policies we compare generally can offer cover for pre-existing conditions, including cancer and heart attacks however this is assessed on a case by case basis and it is essential that you fully disclose these conditions to any insurers at application time otherwise it will be excluded.

* It is important to provide as much detail about your condition to your adviser as you can. Not only is this a legal requirement but the more information provided, the easier it will be for your adviser to approach insurers about finding you cover.

number-10Which companies do you compare?

We compare some of the leading insurance companies in Australia; this is just an example of the different benefits some of the companies offer with their policy. There are many more of these and the best way to find them all out is to talk to one of our consultants so they can discuss the ones that you are interested in:

InsurerExample: Unique Benefit
AIASchool Fees Protector Option to help cover your children’s education costs
AMP ElevateFinancial Planning Benefit of up to $2,000
AMP Flexible LifetimeDiscounts for RACV Members
CommInsureLoyalty bonus of 5% additional free cover when policy held for five years
Macquarie Life FutureWiseNo expiry age for Life Cover
Macquarie Life ActiveOffers a Claim Protector Benefit of up to 25% of your sum insured
Macquarie Life SumoNo expiry age for Life Cover
AsteronHealthy Discount Options allows you to receive premium discounts for maintaining your health
TALPremium Relief Option which waives your premium if you are unable to work for at least 3 months due to sickness or injury.
ClearViewOffers a benefit which allows you to cash in your life cover if you suffer from a specific medical condition such as severe heart attack, stroke and cancer.
OnePathProvides the option of receiving your benefit in monthly instalments which increases your annual benefit amount by 3% each year
ZurichPays an advanced payment of your life cover if you suffer an accidental injury such as loss of hand or foot
MLCGain access to the ‘Best Doctors’ program which allows you to consult with leading medical experts from around the world about your illness
BTLoyalty Benefit Program which provides extra cover for no additional charge after you have held your policy for 3 years
Author: Russell Cain
Published: November 2, 2015

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