Why do I need life insurance

If you're the main income earner in the family, life insurance can help provide a stable financial future for your loved ones if you pass away. Life insurance can help your family manage major household expenses, such as the mortgage and education costs, plus other unforeseen expenses, such as funeral costs.

I have life insurance cover with my superannuation. Why do I need additional life insurance?

It's great that you've started to protect your family's lifestyle. However, your superannuation may have a lower level of cover than you expect and may not be adequate to cover your changing circumstances.

I am self-employed. Why do I need life insurance

Running your own business is an even bigger reason to consider life insurance. Even if you have your own superannuation fund, you may not have any or adequate levels of life insurance cover. So, it's important to review your insurance cover to ensure that both the financial future of your business and your loved ones is secure.

Am I eligible for Life Insurance?

You are eligible for various insurance if you are:

  • aged between 18 and 59 years
  • an Australian or NZ citizen or holder of an Australian Permanent Residency Visa, currently residing in Australia at the time of applying for cover.

How much life insurance do I need?

Most people take out life insurance policy at key stages during their lives, including:

  • getting married
  • starting a new job or changing jobs
  • the birth of children
  • moving house
  • launching a business or partnership

Some Life insurance companies let you choose how much cover you would like depending on your age and circumstances. Whatever level of life insurance cover you choose, your amount of cover is guaranteed to never decrease.

Will insurance benefits be taxed?

Claim benefits may be subject to tax depending on how the insurance is held and to whom benefits are paid to.

What are stepped premiums?

Your premiums will increases at each policy anniversary in line with your age until expiry of your policy.

What are level premiums?

Your premiums will remain constant each year up to your 65th birthday. After this time, your premiums will continue on a stepped basis until benefit expiry.

I don't engaged in paid work, so I don't need insurance?

If your household was to lose its homemaker through illness, injury or death, the effects on the primary breadwinner could be devastating. They may have to reduce their working hours to look after the household or employ outside help, either option requires additional funds.

I am young, healthy and debt free - I don't need insurance

A young person's most valuable asset is their ability to earn an income, what would happen if a young person becomes ill or disabled and couldn't work?

Can I trust that the insurance companies will pay claims?

Life insurance companies have paid a total of $265 billion in claims and retirement benefits between 2000 & 2007. The whole life insurance industry pays out almost $10million every working day in claims to customers. Source www.lifewise.org.au.

Life Insurance is too expensive

For most Australians insurance is very affordable! For less than the price of coffee a day, you can get substantial amount of cover to protect our family's lifestyle.

I am covered by my private health Insurance, why do I need more cover?

Private health insurance provides valuable protection against the medical expenses associated with sickness and injury. But this is where it starts and stops: it's for medical expenses only. It won't cover your bills, debts or replace your lost income if you have to take an extended period off work due to illness or injury.

Private health insurance also may not cover the total cost of your treatment, or rehabilitation - potentially leaving you with a 'gap' that needs to be paid out of your own pocket.

To ensure you have no insurance gaps, a complete protection plan should encompass both private health insurance and life insurance.

The government will look after me if I get sick

he Government, through Centrelink, provides financial assistance for people who suffer a serious disability.

But the Disability Support Pension doesn't go far and there are rules around who is eligible for it.

From 20 September 2009 the Disability Support Pension for a single over age 21, or under 21 with children, is $671.90 per fortnight. (go to www.centrelink.gov.au). Is this enough for you?

Am I covered overseas?

Yes, you are covered anywhere in the world, 24 hours a day, 365 days a year, subject to the policy terms which include a war and travel exclusion. The travel exclusion will operate to exclude cover if a claim arises while you are visiting a country for which the Australian Department of Foreign Affairs and Trade has issued a 'Do Not Travel' warning advice that is in force during the time you stay in that country.

Under the war exclusion, we will not pay a claim arising directly or indirectly from war (whether formally declared or not), hostilities, civil commotion or insurrection.

Can I decrease the cover?

You can decrease your cover at any time by notifying the insurer.

Can I nominate a beneficiary to receive my benefits?

Yes, you can change any details about your beneficiaries at any time by contacting your insurer or adviser.

Can I change my beneficiary?

Yes, you can change any details about your beneficiaries at any time by contacting your insurer or adviser.

How are the cost of life insurance premiums calculated?

The premium you pay depends on the cover level you select, your age, gender, smoker status and your answers to health and lifestyle questions. In general terms, the healthier you are, the lower your premiums will be.

Is my premium tax deductible?

No, generally premiums for life insurance policies are not tax deductible. Premiums for income protection may be tax deductible. Please seek professional advice on your own taxation position.

Are the premiums guaranteed?

Premiums for the cover are based on your age, gender, smoker status, cover amount and answers to your health questions and may be recalculated each year on your policy anniversary if you choose a step premium. If you choose a Level Premium your premiums may also be changed if Life companies rerate their premium tables.

How can premiums be paid?

You can pay your premiums either on a fortnightly, monthly or annual basis. If you pay annually, a discount will apply. The discount will be included in the calculation of your annual premium amount as shown in your premium quotation.

Can I pay annually?

Yes, you can pay your premiums fortnightly, monthly or annually. If you pay annually, a discount will apply. The discount will be included in the calculation of your annual premium amount as shown in your premium quotation.

Do smokers pay more?

Smokers do pay more than non-smokers. The premiums are based on your age, your gender, your smoker status, your general health and lifestyle and the level of cover you select. If you give up smoking for more than 12 months, you can move back to the non-smoker premium. You will need to complete a 'non-smoker declaration'.

Do I have to continue to pay my premiums if I make a claim?

That will depend on whether there is an inbuilt premium waiver or whether you have elected to have a premium waiver.




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