Our fragile mortality is not something everybody wants to face up to and broaching the subject of life insurance in Australia can be uncomfortable. However, there are several reasons why it is worth facing the discomfort and addressing the issue from a logical, practical standpoint. Life insurance in Australia can provide vital, life-changing financial support for bereaved families and there are some other significant advantages to consider.
Key positive features of life insurance in Australia
Although the benefits listed are not universally available, the following list indicates additional features a policy may contain. Some potential features of life insurance in Australia include:
- Death of the policyholder — Provided the death is not self-inflicted and no other excluding factors exist (misrepresentations or withheld information) a lump sum payment will be made directly to the nominated beneficiary.
- Childhood critical illness — Life insurance in Australia may include the additional benefit of offering protection to children between the ages of 2 and 19. A separate lump sum is paid out if the child suffers what is referred to as a ‘critical illness event’. Conditions and amounts will vary, so seek clarification from your chosen insurer.
- Terminal Illness — The entire amount will be payable to the nominated beneficiary if the policyholder is diagnosed with a terminal illness and expected to live for no more than 12 months.
- Future insurability — Life insurance in Australia may include a clause allowing the policyholder to increase the amount of their coverage if they experience a ‘major life event’. This can include, but is not limited to, events such as marriage, divorce, parenthood, and mortgage acquisition.
When researching the most suitable policies, it is crucial to have all the information at your fingertips and avoid mistakes that can be difficult to rectify later. Take your time, do your homework carefully, and never be afraid to seek professional advice if you feel overwhelmed by the myriad details in the fine print.
Meeting the criteria of eligibility for life insurance in Australia
As it does anywhere in the world, life insurance in Australia comes with a strict, binding set of eligibility criteria to be aware of before proceeding. It is crucial to any claim you may wish to make in the future that you fully divulge any and all information upon request. You will also be bound to provide voluntary updates if your circumstances change following the commencement of the policy. Failure to do either gives the insurers grounds to nullify your policy and deny any payment. Your eligibility will depend upon certain factors, namely:
- Your age — Most life insurance in Australia will only be offered to those aged between 18 and 73
- Your residency status — Only Australian citizens and legally permanent residents will meet the criteria for eligibility
- Pre-existing medical conditions — A health check is not usually required, however, you are bound to disclose any pre-existing medical conditions and your insurer will reserve the right to request you undertake one before proceeding.
So, do you need life insurance in Australia?
There is no answer to this question that will cover every individual/scenario and it would be disingenuous to try and give one. It seems safe to say that anybody with dependents to think about and provide for would be well advised to consider life insurance in Australia. The peace of mind it provides, knowing loved ones will be financially secure should the worst happen is reason enough in itself.
