“He spent a lot of time working with different providers to get us the best coverage possible with our pre-existing conditions as well as working through different insurance scenarios to balance the right level of coverage vs cost.”
What is Life Insurance?
As the breadwinner, should you become terminally ill or have a premature death, the life cover will pay a lump sum to your family that they can in turn use for debt payments, living expenses, educational fees. Life cover is also a great way to ensure that no matter what happens to you, your family will be able to bounce back financially.
Total & permanent disability is often bundled with life cover that helps rehabilitation and living expenses if you become permanently disabled.
Trauma coverage often encompasses significant illnesses and conditions that significantly affect your life.
Income protection covers you and your family should you be unable to work due to illnesses or injury.
Why Choose Absolute Insurance?
Absolute Insurance is a family-run business that provides top-of-the-line personally curated life insurance in Perth, Australia that knows the importance of family. They offer a unique experience in terms of insurance service.
They offer a personal approach to finding what plan gives you and your loved ones the best results. With more than two decades of experience, Absolute Insurance is known to find you the best life insurance plan in Perth that suits your needs.
Do I need Life Insurance?
Life insurance helps reduce financial risk by providing support to your dependents. It is a safety net for the people that will heavily depend on you.
If you have a steady income or run a business and you have small children, special-needs children, a spouse, or a long-term partner, you need life insurance. Having a financial safety net shouldn’t be viewed as a luxury.
How Much is Life Insurance in Australia?
In Australia, life insurance often costs between $3 to $32 monthly. Several factors influence the rate of your insurance premium.
Age is a critical factor in insurance premiums. As you age, you become a higher risk for insurers; hence, your premium cost will be higher.
Your lifestyle can also increase or decrease the cost of your Insurance. If you have risky hobbies or activities, then your Insurance might cost you more.
Occupation affects your Insurance. If you have a high-risk occupation like underground mining or construction work, your premium will be more expensive.
Your medical history, permanent medical conditions, smoking status, and coverage period are some of the additional elements that affect your premium costs.
How Does Life Insurance in Australia Work?
There are three ways on how you can purchase your life insurance.
You can purchase life insurance from an insurance adviser. They assess your financial situation and compare coverages to find what best fits you and your lifestyle.
Check out policies by yourself. You can work out the type of coverage that you want from different providers. Hence, you’ll be able to construct your policy precisely the way you like it.
Superannuation life insurance is often cheaper coverage with limited options. These insurances are usually paid through superannuation contributions.
What is the Best Life Insurance?
With life insurance, you have to choose what you want your coverage to have. On the other hand, you can also choose to bundle life insurance together. For example, you can have life coverage and income coverage together.
Since it’s impossible to predict the future, getting full coverage would be best, especially if you have family looking at you for financial support.
What Is Life Cover?
Life cover or life insurance is a bit of a misnomer as it does not provide benefits for life but rather afterlife. This type of insurance pays out a specified amount to specifically named beneficiaries upon the passing of the life insurance policyholder.
There are a wide variety of different life insurance products available designed to meet the needs of various individuals. Whole life cover provides a benefit for the entire life of an individual. Term cover provides benefits for a specified period of time. Death cover provides immediate benefits to beneficiaries and is designed to meet the immediate expenses of a beneficiary.
While life insurance is not essential, it provides for the financial needs of dependents in the future when the main provider passes away. It also provides a means to pay off debts so that family members and loved ones do not become liable for paying these debts.
Most commonly, life insurance is a requirement when buying a house with a mortgage or home loan. The life insurance should be in an amount that will cover the entire outstanding debt on the house. This prevents the loss of the house should family or other dependents not be able to afford the mortgage bond repayments.
What Is Term Life Insurance?
The word “term” in the insurance industry refers to a period of time – usually the period of time over which you are insured. Term life insurance therefore only provides cover for a specified period of time. Policies usually provide cover for 30 years and upwards. Alternatively, the policy can state a specific age at which cover will terminate for example 80 or 90 years of age.
If you pass away during the term of the policy, your beneficiaries will receive full payment in the amount specified in the policy after debts have been paid. So if you took out term life insurance for $500,000 for a term of 30 years and passed away just 1 year after the policy was initiated, your beneficiaries will receive $500,000.
If the policy terminates or reaches the end of the term before you pass away, it may pay out a portion of the amount that you were covered for depending on the conditions of the policy. Most Australians opt for term cover instead of whole or full life insurance because it is often far less costly. It is recommended to speak to a life insurance broker or advisor to determine whether term life insurance or whole life insurance is better suited to your unique requirements.
Who Needs A Life Insurance Policy?
While most people only consider taking out a life insurance policy when they start a family or purchase their first home, every person in Australia can benefit from life cover. Life insurance has two primary purposes – one to repay any debt that you have and two, to provide for your dependents when you re no longer around to do so.
Your dependents may be children, a spouse, parents, grandparents or any other person that is reliant on you to provide for them financially. If you have dependents, then it is highly recommended to take out life insurance to ensure that they are provided for the foreseeable future.
If you have debt such as a mortgage, car finance or any other amount that you owe, you should also consider taking out life insurance. The payment from your life insurance policy will be used to repay these debts when you pass away so that your family or dependents are not saddled with the debt.
Even if you currently don’t have dependents or large debt, taking out a policy when you are young is advisable as you will be paying less for your cover than you would if you were to take out a policy later in life. The life insurance will provide financially for any person who may become dependent on you in the future.
What Is Death Cover?
Death cover pays a specified amount directly to a selected beneficiary or beneficiaries immediately upon the death of the insurance policyholder. This means that the amount is not commonly used to cover debts or any other expenses that were the responsibility of the policyholder before passing which is normally the case with life insurance.
The benefit is also be referred to as funeral or accident cover. The policy usually only makes provision for accidental death and will not provide cover in the event of death resulting from an illness or natural causes. The amount that is paid out is meant to provide for the immediate expenses of family or loved ones such as the cost of the funeral and daily living expenses until an estate has passed probate.
The amount of cover offered is optional and is normally small or much lower than would be the case with a life insurance policy. Death cover can form part of a life insurance policy with a stipulated POD (pay-on-death) clause. This allows the beneficiaries to receive the benefit immediately upon producing the death certificate of the policyholder. A person may have more than one funeral or death insurance policy naming single or multiple beneficiaries.
How Much Life Insurance Cover Do You Need?
Life insurance is there to provide for your family or beneficiaries after you have passed away. The amount of cover that you should take out is therefore largely dependent on what the needs of your beneficiaries will be after you are gone. If you have a spouse and children that are entirely dependent on your income, then it is recommended to take out a policy that provides a greater amount of cover to provide for their needs for the foreseeable future.
If you are paying off a mortgage, car loan or have other debt, this should be factored into the amount of coverage that you need. The amount that you are insured for should at a minimum cover these debts so that your family are not saddled with the expense when you are no longer there to repay the debt. In most cases, debts are paid first from a life insurance policy and the beneficiaries will receive the remainder.
Some other factors to take into consideration when choosing life cover include the future educational needs of your children, medical or healthcare needs of your family as well as any special needs (for example, a disabled or special needs child). Every person has a unique set of circumstances and will, therefore, require a different amount of life cover.
Life Insurance FAQ
What Is the Difference Between Term and Whole Life Insurance?
The term life insurance coverage will protect you for some years. The whole life protection will protect you for the rest of your life. Each case demands a different type of Insurance. So it is best to have a one-on-one consultation with an expert.
When is the Right Time to Buy Life Insurance?
The best time to buy life insurance is before you need it. If you buy life insurance before something happens to financially affect your loved ones, the life insurance coverage will take care of your family. The insurer will use your age and health to determine the pricing and your eligibility. That is why life insurance is more affordable if you are young and healthy. If you have young children, you need life insurance coverage.
What Happens If I Don’t Buy Life Insurance?
Some people don’t need to buy life insurance. However, if you do not buy life insurance and you have outstanding debts, your loved ones may be held liable to pay your outstanding debts.
Do I Get My Money Back If I Outlive My Life Insurance?
If you outlive your life insurance, you can get your money back. But you will not get the money with interest. The money you will get is not taxable. This is because it is the return of the payments you made.
Can I Get My Premiums Back If I Cancel My Life Insurance?
No, you will not get your money back if you cancel your life insurance. However, your insurer might return your money if you cancel your life insurance if you paid your premiums in advance or if you cancel it during the mandatory cooling-off period.
What Happens to Life Insurance When the Mortgage is Paid Off?
After you pay off your mortgage, your policy can return your premiums if you did not file a claim. However, the worth of premiums the insurer will return will be less. This is because inflation erodes the value of the premiums.
If you are looking for the best rates, you need to talk to an Insurance broker. An Insurance broker works with multiple insurance providers and so he/she will help you compare quotes and choose the best that suits you.
CLAIM YOUR FREE CONSULTATION
Want to find out more or not sure where to start? Get in touch for your free consultation. We’ll meet you at a Perth location that’s convenient to you to discuss how we can help you.