Life Insurance Australia

Yes, it’s perfectly legal and, in fact, recommended that you diversify your life insurance portfolio. The cover you’ve purchased as a young adult will not always be adequate as your life circumstances change. For example, you may need to increase your sum insured when you get married, have children, or buy a house.

Some benefits, such as income protection or temporary disability cover may not be available on your existing policy, so there is no harm in insuring these risks elsewhere. It's also important to be mindful of how your income and buying power has changed and will change over time.

Yes, to prevent your policy from lapsing, you’ll need to pay your premiums until the day you die. For this reason, it’s imperative to ensure that you’ll be comfortable with these payments even when your income changes in retirement.

When buying your cover, be sure to take a look at the premium projections if you are on a stepped payment structure, as the cost of your insurance will be increasing annually and likely be affected by your age.

As an alternative to this, you can opt for a level structure and manually increase your cover in future as you see fit. As always, it’s best to speak to your broker about which options best meet your needs.

Most life insurers will cover you for suicide after a specified exclusion period. While this differs from company to company, this period generally lasts 13 months. However, it’s important to note that if you’ve previously attempted suicide, it may be excluded from your cover altogether.

Fortunately, most benefits paid out from life insurance policies are not taxable, but there are a handful of exceptions to this rule.

Adult beneficiaries who are not considered financial dependents may be liable to pay tax on their portion of the payout, regardless of their relationship with the policyholder. Additionally, life policies held in your superannuation fund may also be subject to taxation, however, the rules surrounding this are very specific to who the beneficiaries of the policy are.

It’s best to receive advice from your broker in this regard so that your personal circumstances can be taken into account when selecting a policy.

Your home is a major asset, and it would be a tragedy if your family were to lose it in the event of your death. Furthermore, if your home loan repayments are dependent on your income, it’s vital to take out cover that will assist with the repayments if this income no longer existed - which includes risks like permanent or temporary disability and retrenchment. Ensure that your cover amount exceeds the value of the loan so that your family can maintain ownership no matter the circumstances.

When assessing your risk, a life insurance company will take a number of factors into account, including your occupation, health, travel patterns, and even your hobbies. Based on your answers to certain questions, your insurer may choose to offer you higher premiums to offset high-risk factors or exclude certain activities and conditions from your cover. For example, if you have a history of tumours or cancer, it’s unlikely that you will be allowed to claim for this condition in future. Additionally, most life policies have general exclusions in place that are applicable to all policyholders. These may include criminal activity, drug use, or riots and warlike events.

If you reside in Perth, you’re welcome to book an in-person consultation with Greg Maguire at a time that suits you. However, virtual consultations are also available outside of Perth. During your session, Greg will perform a needs analysis and inform you of any pertinent information required to best meet your financial needs. Email us for more information.