Addressing the subject of life insurance in Australia is not something everybody wants to have to think about but there are a few very good reasons why it is important to do so. Life insurance can represent a vital influx of financial support for families and dependents, providing them with a significant lump sum in the unfortunate case of a deceased or terminally ill policyholder. But there are some other benefits most people may not be aware of and we will take a closer look at them here.
Advantages and key features of life insurance
While there are often many similarities and exact replications of terms and conditions across life insurance policies from competing insurers, they are not all inherently the same. Your chosen insurer will custom-build you a life insurance policy based on your exact circumstances and requirements so not all of the following benefits or clauses will be universally available.
- Death Benefit – A payment made directly to the beneficiary nominated in your policy in the form of a one-off lump sum.
- Child’s Critical Illness Benefit – Some life insurance policies will have additional benefits, including protection for children aged 2-19. The policy will pay out if they suffer from what is described as a ‘critical illness event’.
- Terminal Illness benefit – For any diagnosis of terminal illness or other situation leaving the policyholder with less than 12 months to live, most life insurance policies will pay the full amount in advance.
- Future insurability clause – Your chosen life insurance policy may contain a built-in clause that allows you to increase the amount of your coverage in the case of a ‘major life event’, such as marriage, parenthood, and acquiring a mortgage among others.
Eligibility for life insurance
To be deemed eligible to take out a life insurance policy, you will need to divulge a certain amount of personal information and meet some other important criteria, namely:
- Age – In most cases, you need to be aged between 18 and 73 to attain a policy
- Citizenship or residency – Only Australian citizens or permanent residents of Australia are eligible to take out life insurance
In most cases, a health check will not be required but you must provide accurate records and divulge any pertinent information to avoid invalidating any subsequent claim.
Do you really need life insurance?
When we are dealing with such a sensitive, personal topic as an individual’s need for life insurance, it is impossible to throw out a blanket answer and expect to cover everyone. From a family’s only breadwinner in Mirboo North to single, working professionals in Brisbane, there are as many different scenarios and reasons for considering life insurance as there are people interested in doing so. However, what we can say for sure is this: when it comes to providing yourself and your loved ones with peace of mind, there can be few more effective ways of doing so.
Needing to claim life insurance is never going to be a joyous occasion but it can, at least, soften the financial blow significantly and allow those left behind to maintain their standard of living and grieve without financial worries. And that fact alone is surely worth the price of the premiums.
