life insurance for families

5 Things You Never Knew About Life Insurance

Did you know that one in five Australian parents will be unable to work, or will die, before they hit retirement age? Research has also shown that 81 per cent of Australians think that life insurance is too expensive, but 61 per cent of them have actually overestimated the cost.

Life insurance is one of the last things most people want to think about, but it is pretty important.

If you were to get diagnosed with a terminal illness or die today, what would happen to your family financially? Life insurance is designed to mitigate the risks associated with this in the event of serious illness or death with a lump sum being paid to your loved ones. Some life insurance policies will also include funeral cover. So, as morbid as the topic is, understanding life insurance is a must!

why you need life insurance

Here, we look at five life insurance facts that a lot of people don’t know about!

Life Insurance in Australia is More Than 180-Years Old

The first Australian life insurance policy was sold by Alliance Assurance (now known as Asteron Life Limited) way back in September of 1833. The policy was sold to Joseph Tice Gellibrand, who was a barrister for the Supreme Court of Tasmania and the state’s first Attorney-General.

Alliance Assurance then paid their first claim on a life insured when Gellibrand went missing near Geelong in February of 1837. He and his companion, George B. L. Hesse were travelling to Melbourne from Geelong via the Barwon River and the Leigh River but never arrived at their destination. It’s suspected the two men got lost and died in the heat of the summer. Search parties were arranged but the men’s bodies were never found.

There Are More Than 30 Active Providers in Australia’s Life Insurance Marketplace

Since Asteron first introduced life insurance to the Australian marketplace in the early 1830s, dozens of other providers with a diverse range of product and service offerings have joined the field.

Australia currently has 32 life insurance providers including the likes of AAMI, Bendigo Bank, Bupa, Woolworths, GIO and many more!

Most Life Insurance Providers Will Renew Your Policy Even if Your Health Condition Changes

In most cases, once you’ve taken out your life insurance policy you don’t necessarily have to notify your insurer of any changes to your health. Allowing you pay your premiums on time, your policy can continue to be renewed up until the maximum age limit that’s listed in the policy. This means that taking out life insurance when you’re young can be beneficial as you get older and your health starts to deteriorate.

Life Insurance Encompasses More Than Just Death Cover

Most life insurance policies will pay a lump sum payment upon death to the people named on your policy. However, that’s not the only way life insurance can provide financial protection. You can also include the following cover in your policy:

  • Income protection: If you’re temporarily unable to work due to injury or illness, income protection will usually pay 75 per cent of your monthly gross income until you can return to work or the policy expires.
  • Total and permanent disability insurance (TPD): If you become totally and permanently disabled from injury or illness, TPD will pay a lump-sum benefit.
  • Trauma Insurance: If you suffer a critical injury or are diagnosed with a critical illness, you can receive a trauma insurance payout. (Keep in mind that this doesn’t include cover for fatal conditions, only core life insurance provides that).

There’s No One-Size-Fits-All Formula for Determining a Life Insurance Policy

As with most types of insurance, there’s no one-size-fits-all when it comes to life insurance. Each individual and family will have different requirements, as you’ll need to take into account your current and future financial obligations.

To ensure you find the policy that’s right for you, you’ll need to have it tailored to suit any debts that you have, your household expenses, funeral costs and etc. As awful as it sounds, the only way your insurance broker will be able to set you up with the cover that will meet your family’s needs, is if you think about what expenses will need to be covered if you were diagnosed with a debilitating disease, or if you died today.

So, do you have life insurance? If not, it could be time to look into it. Talk to Sarina Insurance about the options available to you today!

READ MORE: AIA Testimonial_Geoff’s story