Life Insurance 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 life insurance contract.  We generally define life insurance as a contract of insurance in which the policyowner pays a premium to the insurer and the insurer pays the sum insured or provides a benefit to the policyowner, or a person nominated by the policyowner, 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 life insurance.  The terms will differ from one insurer to another and may differ from one policyholder to another.

List of registered life insurers

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

Why is life insurance important?

We all know life is full of unexpected surprises. The death of a loved one can put enormous strains, emotional and financial, on a family. Life Insurance 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 Life insurance cover.

How does life insurance work?

Life insurance (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 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.