The Life Insurance Industry in Australia is well regulated according to legislation, such as the Life Insurance Act of 1995. The legislation covers many aspects such as who can offer a life insurance policy and how life insurance policies can be structured. At the time of writing, there are 25 life insurers listed as being regulated by the Regulator under Section 21 of the Life Insurance Act . There are also 10 Friendly Societies regulated under 16C of that Act. These institutions may have offered life insurance policies in the past and some may still offer policies to new customers.
There are different types of life insurance policies as defined by the Act. For example :
- A contract of insurance that provides for the payment of money on the death of a person or on the happening of a contingency dependent on the termination or continuance of human life;
- A contract of insurance that provides for the payment of an annuity for a term dependent on the continuance of human life;
- A continuous disability policy
A full list can be found in the Act.
Most people, that are interested in a life insurance policy in Australia are referring to policies that will pay a benefit in the event of Death, Injury or Disability of the insured person. This is sometimes referred to as “risk insurance” because there is often no savings component of the policy and the policy only responds if a risk such as an illness happens. The cover provided by Life Insurance policies like these can include one or more of these elements of cover :
- Life Cover – pays a benefit in the event of death
- Total and Permanent Disability cover – pays a benefit if the insured is severely ill or injured
- Income protection – pays an ongoing monthly benefit whilst a person is ill or injured to a certain minimum extent
- Trauma Insurance – sometimes referred to as “critical illness” which pays a lump sum on the specific diagnosis of specified illnesses
The insurance product of each insurer will use specific names to label the coverage provided and will issue a document known as a Product Disclosure Statement or PDS that will specifically define what is covered and how the policy will work in detail. The latter may differ from insurer to insurer and from policy to policy.
Australians may obtain life insurance cover through a range of distribution channels. These commonly include financial advisers like Experien Insurance Services, direct from life insurers, from superannuation funds and collective arrangements by employers. Each channel has advantages and disadvantages compared to each other.
The advantage of using Experien Insurance Services is that you can get personal advice and recommendations based on your own specific needs, goals and circumstances. You will also be able to compare prices and benefits across multiple insurers and have choice in which insurer to use and how to structure your coverage. We also help you arrange evidence of your good health that can be presented to the insurer and this may improve the terms you may be offered for cover.
Information on our website is general in nature and does not take into account your personal circumstances. You should consider personal advice that allows for your own goals and situation and always read the Product Disclosure Statement (PDS) issued by an insurer before considering buying cover.
