Small Premiums Means Small Life Insurance Cover

The old saying goes "you get what you pay for". This is especially true with life insurance policies. Small premiums will most likely mean a small life insurance payout, or no payout at all.

Lifebroker is a life insurance broker, which only deals with companies who offer comprehensive premiums, at competitive rates. There is, however, a number of policies on offer that aren’t comprehensive policies. What they are, are cost intriguing, which brings consumers in.  

"Pay two dollars a day for life insurance – less than a cup of coffee!"

If you invest in a cheap policy it can mean purchasing policies that are not fully comprehensive policies. There are most likely hidden exclusions in the policy, which are not apparent straight away. There will also be very heavy terms and conditions associated with these products, hence why most insurance agents do not have them on offer. The policy may not be medically underwritten upfront, which means the insurance company has no idea what type of risk you are, which is why there can be hidden exclusions or terms and conditions.

If you do decide to take out a comprehensive life insurance policy through a broker, taking out a small amount of cover leaves you at risk of being underinsured. Even though with a medically underwritten product you are guaranteed to be paid out your lump sum, if you don’t insure yourself for your required amount, you can leave yourself at risk of underinsurance. A lower cover amount will often mean a less expensive premium, which is the only option for some people.

With Australia’s chronic underinsurance problem, we would never recommend you going above your budget, which could lead you to cancelling your policy altogether. It is always best to have some cover in place, rather than none at all. However, if you can afford it, ensure you have a comprehensive product, with a relevant cover amount to your debts.

Talk to a financial adviser or a life insurance consultant today, to determine what type of cover and how much is adequate for your situation.