What is Life Insurance?

Life insurance is a type of cover that pays a lump sum of money if you die or are diagnosed with a terminal illness.

The size of the lump sum is nominated by you when the policy is first taken out, and can generally be changed at any time prior to a claim event occurring.

Why do we need life insurance?

The primary purpose of life insurance is to provide financial security to your family and loved ones in the event of your death.

There will always be major financial and emotional impacts resulting from the death of any family member, but the loss of the main income earner can have a devastating financial impact on most households.

Immediately following such an event, your family will need access to emergency funds to cover funeral expenses and the general cost of living. In the short to medium term they will need to repay your debts, and in the long term they will need ongoing income to survive now that your income is no longer available.

What can life insurance cover?

The funds from a life insurance payout can be used to cover anything your beneficiaries see fit. There are no restrictions on how they use your life insurance proceeds.

Commonly, life insurance proceeds are used to repay debts and mortgages, cover funeral expenses and other finalisation costs, provide an ongoing income for the family and cover other costs such as private school fees.

By extinguishing your debts and providing an ongoing income, or at least providing a small financial buffer, life insurance can give you peace of mind knowing that your loved ones will be looked after when you’re not there to look after them yourself.

How much life cover do we need?

The answer to this question will vary from one person to the next depending on their own circumstances as well as their needs and objectives.

As detailed above, life insurance proceeds are commonly used to repay debt and provide ongoing income, so this is a good place to start when determining how much cover you need.

Who offers life insurance in Australia?

Life insurance is offered by a number of different companies in Australia, however the majority of policies are issued by large financial institutions, many of which are now household names.

Some of the largest issuers of life insurance in Australia include AMP, Comminsure, MLC, Asteron, AIA, Macquarie Life, TAL and Zurich.

How much does life insurance cost?

Life insurance premiums are based on a number of different factors including your age, gender, occupation, smoking status and the amount of cover you require.

Premiums can also vary from one insurance company to the next, so it is certainly worth taking the time to shop around and find the best deal.

With so many variables affecting life insurance premiums, the easiest way to find out how much it will cost to protect your family’s financial security is to give us a call on 1300 793 143 or fill out life insurance quotes form on our website.

What is life insurance? It’s peace of mind.