Home
Blog
Life Insurance
Guide To Choosing Life Insurance For The First Time

In short

Check what each policy covers and what it excludes before you buy.
Premiums depend on your age, health, lifestyle, policy type and amount of cover.
Level premiums start higher but stay constant, while stepped premiums start lower and rise over time.
Disclose all pre-existing health conditions, as non-disclosure can affect future claims.
Consider whether you can increase cover later and how strong the insurer’s financial rating is.

Choosing life insurance for the first time can be an overwhelming experience. This guide will help you navigate the process smoothly and ensure you make the best decision for you and your loved ones.

Understanding Life Insurance

What Does Life Insurance Cover?

Life insurance is designed to replace your income if you suffer a major health catastrophe, injury, illness, or unexpected death. Policies can cover accidental death, death from disease, income protection, and Total and Permanent Disablement (TPD). Always check the specific coverages before purchasing.

Read more: How Does Life Insurance Work?

What Does Life Insurance NOT Cover?

Life insurance policies often exclude certain events. For example, some policies do not cover suicide within the first 13 months, or accidental deaths such as drowning, poisoning, and drug overdoses. Be aware of these exclusions to avoid future issues.

Types of Life Insurance

Term Life Insurance

Term life insurance offers temporary coverage for a fixed period (typically 10 to 30 years). If you die within this period, your beneficiaries receive a payout. It’s ideal for providing financial support during your income-earning years.

Permanent Life Insurance

Permanent life insurance is designed to last your entire life and includes several subtypes, such as whole life, universal life, and final expense insurance. These policies often come with a cash value component that you can borrow against or withdraw from while alive.

Costs and Premiums

The premiums for life insurance depend on factors such as age, health, policy type, and coverage extent. Compare premiums from multiple insurers to find the best rates without compromising on essential coverage.

Level vs. Stepped Premiums

Understand whether you prefer level premiums, which start higher but remain constant, or stepped premiums, which start lower but increase over time. Choose the one that fits your long-term financial plan.

Other Considerations

Be Honest About Health Conditions

Disclose all pre-existing health conditions when applying. Insurers may exclude certain high-risk conditions or activities, and non-disclosure can impact future claims.

Review and Change Policy Details

Ensure your policy allows flexibility to increase coverage without a new health check and the ease of switching policies if needed. Reading the fine print and talking to an expert can help avoid misunderstandings.

Beneficiaries and Financial Stability

Consider who your beneficiaries will be and ensure the company you choose has a strong financial rating to guarantee reliability when benefits are needed.

Additional Coverage Options

Policies such as trauma insurance, disability insurance, and critical illness insurance can provide extra security. Evaluate these options based on your specific circumstances and needs.

Frequently Asked Questions

1. What Factors Impact the Cost of Life Insurance?

Several factors, including age, health status, lifestyle, and the type and amount of coverage, impact life insurance premiums.

2. Can I Change My Life Insurance Policy Later?

Yes, you can switch policies or increase coverage, often without additional health checks if changes are made within certain time frames.

3. What Types of Life Insurance Are Available?

The main types are term life insurance and permanent life insurance, with subtypes such as whole life, universal life, and final expense insurance.

4. What Happens If I Miss a Premium Payment?

Missing a payment can lead to policy cancellation. Most policies offer a grace period, but it’s crucial to understand the specific terms in your policy.

5. How Do I Choose a Reliable Life Insurance Provider?

Look for insurers with strong financial ratings from independent agencies and positive customer reviews to ensure reliability and performance.

Absolute Insurance understands that choosing a life cover for the first time can be daunting. We are here to help you every step of the way. Contact us today to discuss your life insurance needs and get personalised advice tailored to your circumstances.

Related posts:

Reviewed by Greg Maguire

Greg Maguire reviewed this article to make sure the information is accurate and reflects current insurance practice. It is general advice only and does not take your personal circumstances into account.

Greg Maguire is an Authorised Representative (No. 255354) of AD Advisory Services Pty Ltd, ABN 68 005 830 802, AFSL 237058.

Greg Maguire

Principal

Greg Maguire is the founder and principal of Absolute Insurance, a family-run Perth life insurance broker he runs with his wife Steph. Greg has spent more than 20 years helping Western Australian families and business owners protect what matters most, with life insurance, income protection, TPD and trauma cover from Australia's leading insurers.

Before insurance, Greg was a primary school teacher, and that same patient, one-to-one approach is how he still works today. He takes the time to understand your situation, explains your options in plain English, and stands beside you and your family if you ever need to claim.

Greg holds an Advanced Diploma of Financial Planning from Deakin University and a bachelor's degree from Edith Cowan University. He is an active member of the local community through the Chamber of Commerce and Industry WA and Baldivis Rotary.

Greg Maguire is an Authorised Representative (No. 255354) of AD Advisory Services Pty Ltd, ABN 68 005 830 802, AFSL 237058.

After putting it off for years, my wife and I finally bit the bullet and had Greg assist us in renewing our insurance policy’s. In doing so Greg worked professionally and diligently to find us the best policy. We would both strongly recommend his services.

Nick Ursulic

Greg was amazing to work with and really helped me receive the insurance I wanted for my financial protection when no others were able too. Absolutely fantastic!

Natasha Maitland

Greg has been absolutely amazing with his level of service provided to us for our life insurance and income protection needs. Nothing was too much trouble for him. Great communication skills, knew exactly what we were hoping to achieve and did everything in a very timely manner and made the service to us very personal. He listens and delivers what he promises. Truly grateful for his time and highly recommend his services.

Scott Rountree

Very happy with the service Greg Maguire at Absolute Insurance has provided. He took the time to understand our situation properly and worked hard to find cover that suited our needs and budget. His understanding of FIFO and mining-related roles made a real difference. Clear communication, responsive service and practical advice throughout. Happy to recommend.

Robert Keilar

Super happy with the insurances Greg set up for us and love supporting local businesses

Samantha P

I would absolutely recommend Greg’s services. Before working with him, I had a difficult time obtaining insurance due to complexities in my medical history. Greg guided me through the process from start to finish, acting as a liaison with the underwriters and helping ensure the necessary information and evidence were provided. Nothing ever seemed too complicated or too much trouble for him. I really appreciated his advice, persistence, and willingness to advocate on my behalf with the insurers. Thanks to his support, I was able to secure several policies with some exclusions but no premium loading, which was a much better outcome than I had expected. Thank you, Greg!

Jessica Scholle

Greg has helped us with our insurances for many years. Over that time he has always taken incredible care to ensure that he is suggesting really sensible and considerate options for our needs. Insurance is complicated, but Greg makes it so much easier.

Val Smith

My parents, my partner and I have been with Absolute Insurance for well over 20 years. Greg has been amazing and would highly recommend him to anyone that needs a trusted advisor.

Gregory Allen

We have had Greg’s support and guidance managing our Life Insurance Policies over many years. He has always sought the best options for us and has provided sound advice as our circumstances charged over time. We have always appreciated his flexibility and efficiency. It has been a pleasure doing business with him.

Philip O'Connor

From the start to the finish, Greg was a pleasure to deal with, very professional and most importantly found me and my family the best insurance cover to suit our needs, very happy with the service provided.

Craig

Guide To Choosing Life Insurance For The First Time