Different Types of Life Insurance Products in Australia
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There are different types of life insurance that are designed to provide financial support if you experience serious injury, illness or pass away.
Income protection can replace a proportion of your lost income if you’re unable to work because you’ve been injured or are sick for an extended period. If you and your loved ones depend on your income to cover daily expenses, rent or mortgage repayments, or the cost of caring for children, income protection could be worth considering.
When you take out a policy, there are different options available that determine how much you are covered for and for how long. These will be outlined in the insurer’s product disclosure statement (PDS).
Total and permanent disability (TPD)
Total and permanent disability (TPD) insurance can cover you, and people who depend on you, if you can’t work ever again due to permanent disability by proving a once-off lump sum payment. TPD insurance can help cover day-to-day expenses, outstanding debts and rehabilitation if you need it. It can also provide support for your family in the absence of your income.
Trauma or Critical Illness insurance can provide a lump sum payment for financial support for everyday expenses and medical expenses incurred if you’re diagnosed with a specified critical illness covered by the policy. The definition and number of conditions covered differ between each insurer and product, but they usually include major illnesses that affect your life in a significant way, like malignant cancer, a serious heart attack or stroke.
Death cover (or ‘life’ cover) is a lump sum payment designed to help cover any debts you have if you pass away, as well as any care and education costs for your children or loved ones. It could also provide income to help your family with day-to-day living expenses.
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 – this will help you decide which types of life insurance you may need, as well as your cover amounts..
- Shop around and compare the different insurance providers to find which is best for you.
- Ask us if you’re unsure of anything – when it comes to insuring your life, there’s no such thing as a ‘dumb question’.
- Discuss your policy options with your family and loved ones.
- Complete your insurance application carefully and truthfully, remembering your duty to take reasonable care not to make a misrepresentation.
- Read the PDS to make sure you know what you’re being covered for.
- Keep a copy of any forms you fill out, and the PDS, for your personal records.
The 'don'ts' of life insurance
- Don’t just pick the cheapest option without properly researching the other options available.
- Don’t skim through the PDS – read it in full so you understand all the benefits included and any restrictions that may apply.
- Don’t risk a declined claim by omitting or misrepresenting information on any insurance forms you fill out.
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. That’s why we take the stress away and do the legwork for you. Simply use our comparison tool to compare different types of life insurance from some of the leading insurers in the market.
Our calculator can also help you understand the level of cover you may need by looking at your income, debts and other living expenses.