This category of insurance, also known as life cover, is about protecting the people around you that matter the most. It provides financial protection in the event that you were not longer around to support and provide for loved ones.

What is life insurance ?

The definition of Life Insurance can be found in legislation such as the Life Insurance Act 1995 which regulates the registration and prudential conduct of life insurers and the Insurance Contracts Act 1984 which regulates the insurance contract.  We generally define life insurance as a contract of insurance in which the policy owner pays a premium to the insurer and the insurer pays the sum insured or provides a benefit to the policy owner, or a person nominated by the policy owner, on the occurrence of the insured life event, which is commonly death or the diagnosis of terminal illness.

Each insurer will issue a Product Disclosure Statement, policy document and associated schedule that will contain the exact terms and conditions applying to each issued contract of insurance.  The terms will differ from one insurer to another and may differ from one policyholder to another.

List of registered life and income protection insurers

APRA is Australia’s prudential regulator of banks, insurance companies and most superannuation funds.  Click here for the list of Insurers and Friendly Societies registered with APRA for life cover.

Why is life insurance important?

We all know life is full of unexpected surprises. The death of a loved one can put enormous emotional and financial strain on a family. Life cover provides a lump sum payment in the event of death. This provides protection to loved ones and will assist in paying off any outstanding debts such as a mortgage or investments. There should also be enough to enable your family to continue to live their lives without financial difficulty.

Without any funds, your partner and family may be required to sell their home, sell their investments, shift schools and be forced to work two jobs. This is very easy to avoid through appropriate cover.

How does life insurance work?

Life cover (also known as Death Cover or Term Insurance) pays the sum insured amount as a lump sum upon the Insured’s death. This amount is usually paid to their estate, policy owner or spouse.

Some policies provide extra benefits, such as terminal illness benefit (at no extra cost), where if you are diagnosed with a terminal illness the amount insured is paid out. We will only quote on the policies that provide this.

How much life insurance cover is enough?

There can be many elements to working out this figure, depending on personal circumstances, but some major factors to consider are:

  • How much would it cost to clear all debt (mortgages, personal loans etc.)?
  • Do you have enough money to cover funeral and other unexpected expenses at time of death?
  • What future costs do you anticipate (children’s school or university fees, retirement funds)?
  • What amount of capital would your family need to have enough money to reasonably maintain their lifestyle and for how long?

Please speak with an Experien Insurance Adviser for further information.

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.