It’s hard to think of your loved ones or family struggling to cope. If you’re unable to fully support them, what will they do? For reassurance and peace of mind, consider taking out a life insurance policy that will assist you and your family in times of need.
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According to the Australian Securities and Investments Commission, there are different kinds of life insurance that provide support when you experience serious injury or pass away.
‘Income protection’ can replace your lost income if you are unable to work because you’ve been injured or are sick for an extended period of time. There are different options available when taking out a policy that determine what you are covered for and for how long. These will be outlined in the product disclosure statement of the insurer you chose to go with.
Total and permanent disability (TPD)
‘Total and permanent disability (TPD)’ insurance can cover you, and people who are financially dependent on you, if you can’t work due to permanent disability. TPD insurance can help cover day-to-day expenses, outstanding debts and rehabilitation if you need it.
‘Trauma’ insurance can provide financial support for everyday expenses and help cover the medical expenses incurred when you’re diagnosed with a covered illness or injury. The number of conditions covered and the definition for each one differs between each trauma product, but it usually includes major illnesses or injuries that affect your life in a significant way, such as cancer, a heart attack or a stroke.
‘Death cover’ is designed to help cover any debts you have if you die, as well as any care and/or education costs for your children or loved ones. Death insurance may also provide income to help your family with day-to-day living expenses when you pass away.
Top tips for buying life insurance
The 'dos' of life insurance
- Think about your needs – based on your family situation, income and any debts you may have.
- Shop around the different insurance providers to find what’s best for you.
- Discuss your policy options with your family and loved ones.
- Read the product disclosure statement to makes sure you know what you’re being covered for.
- Ask the insurer if you’re unsure of anything – when it comes to insuring your life there’s no such thing as a ‘dumb question’.
- When filling out the insurance application, remember your duty of disclosure, make sure you do so carefully and truthfully.
- Keep a copy of any forms you fill out, and the product disclosure statement, for your personal records.
The 'don'ts' of life insurance
- Don’t pick the cheapest option just because it seems the easiest, take the time to find out what other options are available.
- Don’t skim through the product disclosure statement – read it in full so you understand all the benefits available to you.
- Don’t lie on any insurance forms you fill out, as this can result in your application or your claim being declined.
Comparing and calculating life insurance with Lifebroker
There are a lot of insurers out there with different policies, and this can make it overwhelming when looking for a policy that suits you, your family and your loved ones.
Read our top tips for comparing life insurance or use Lifebroker’s comparison tool to discover what policies are suited to you. If you’re unsure of how much cover you need, Lifebroker’s insurance calculator can also help you understand the level of cover you may need by looking at your income, debts and other living expenses.