Coverage: Provides a lump sum payment to beneficiaries in the event of the insured person’s death or terminal illness diagnosis.
Flexibility: Can be tailored to cover specific financial needs such as mortgage repayments, education expenses, or ongoing income for dependents.
Total and Permanent Disability (TPD) Insurance:
Coverage: Pays a lump sum if the insured person becomes permanently disabled and is unable to work.
Purpose: Helps cover medical expenses, rehabilitation costs, and ongoing living expenses.
Trauma Insurance:
Coverage: Provides a lump sum payment upon diagnosis of a specified critical illness or medical condition (e.g., cancer, heart attack, stroke).
Use: Funds can be used for medical treatment, lifestyle adjustments, or other financial needs.
Income Protection Insurance:
Coverage: Replaces a portion of the insured person’s income if they are unable to work due to illness or injury.
Benefits: Typically pays a monthly benefit for a specified period (e.g., until the insured person returns to work or reaches retirement age).
Key Features of Life Insurance in Australia
Regulation: Life insurance in Australia is regulated by the Australian Prudential Regulation Authority (APRA) and must comply with the Life Insurance Act 1995.
Premiums: Premiums for life insurance policies can vary based on factors such as age, health, occupation, and the level of coverage chosen.
Taxation: Generally, premiums for life insurance policies are tax-deductible, and benefits paid to beneficiaries are tax-free.
Underwriting: Insurers typically require applicants to undergo underwriting, which assesses their health and lifestyle factors to determine eligibility and premiums.
Major Life Insurance Providers in Australia
AMP Life
CommInsure
TAL (formerly Tower Australia)
Zurich Australia
MLC Life Insurance
Considerations When Choosing Life Insurance
Coverage Needs: Evaluate your financial obligations, such as mortgage repayments, living expenses, and dependents’ needs, to determine the appropriate level of coverage.
Policy Features: Compare policies to understand the benefits, exclusions, waiting periods, and optional extras offered by different insurers.
Advice: Seek advice from a financial adviser or insurance broker to help navigate policy options and ensure you choose a policy that meets your specific needs.