Life Insurance

Also known as death cover, life cover, or just Life Insurance, it pays an agreed lump sum of money if you die or are diagnosed with a terminal illness. Most policies can be renewed up to age 99. On most policies there is an exclusion applied in the first 13 months of the life of the policy if the death is due to suicide.

If you die, your family can use the lump sum payment from Life Insurance to:

  • Pay off debts
  • Pay for the funeral and / or medical expenses, and
  • Provide an income to maintain their lifestyle and achieve their financial goals

Do not confuse Life Insurance with accidental death insurance. Life Insurance provides a payment regardless of the method of death. Accidental death cover offers very limited protection because of its significantly lower premiums.

Do Life Insurance policies differ across Insurers?

Life Insurance is a simple insurance policy and is similar across most insurers. There is little, if any difference between most Life Insurance policies.

Life Insurance options

Most Life Insurance policies provide the option of including Total and Permanent Disability (TPD) and Trauma Insurance. These can usually be either linked as a rider to your Life Insurance policy, or managed as a stand-alone policy (in addition to your Life Insurance).

How much does Term Life Insurance cost?

Premiums are calculated based on a number of factors, including:

  • Age
  • Gender
  • Smoking status

Tax treatment

Life Insurance premiums are generally tax deductable if inside super and not tax deductable if structured outside super, however this also means that the pay out from a Life Insurance policy is generally also tax free (outside super).