Life insurance in Australia can be split into three main categories. This will help you understand what is meant by each and which type of policy may be right for you.

Life insurance can refer to:

  • Term life insurance: covers you for a set number of years or until you reach a certain age (whichever comes first), so you can be covered for the period in life when you need it most.
  • All of life insurance: this type of policy covers you for as long as you live or make a full payment claim (or until you decide to cancel).
  • Group life insurance: this is a type of policy that you receive through your employer or superannuation fund. Keep in mind that group life insurance is not tailored to your specific needs or budget as your employer/super fund simply purchases a single contract which covers several people, being the funds members. This cover may expire when you reach a certain age or retire. These policies each have their own benefits and features that you need to consider.

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The different types of features and benefits of life insurance

When purchasing life insurance, you will likely come across different features and optional add-ons available in the market. Understanding what each of these are and what they cover will help decide whether or not they’re right for you.

Product Summary
Life insurance

This is the basic cover under a policy that pays out a lump-sum benefit to your family when you pass away.

The process usually starts by getting approved by an insurer and then setting your benefit amount (how much you want your family to receive).

Life insurance for older Australians

Some insurers offer specific benefits that can be helpful for those of us over the age of 50. That includes being able to take out cover from a later age or even having a simple application process without having to undergo any medical tests. Depending on your personal circumstances, you may find these types of policies are more relevant to you and easier to take out cover. Read more about life insurance for seniors.

Terminal illness insurance

Policies with terminal illness cover will pay you a lump-sum benefit if you are diagnosed with a terminal illness with 12 months or less to live. However, every insurer is likely to have their own specific definition and terms around a terminal illness.

This benefit can help you organise any final expenses you would expect your family to have, such as a funeral or estate fees. It can also be used to pay for any palliative care that you might need in order to live comfortably and pain-free.

Direct life insurance

Direct life insurance is any life insurance policy that you can purchase on your own, directly from the insurer, without using a third-party agent or broker. You can simply call the insurer yourself, discuss your options, and set up a policy over the phone. 

Buying life insurance directly means you need to do your own research to find the right policy. However, don’t be discouraged – you don’t need to be a financial expert to do this. If you have access to a computer and internet connection (which most of us do), you can easily find plenty of resources and policy types to choose from. Find out more about direct life insurance here.

Life insurance through superannuation

This is most commonly referred to as group life insurance. Your employer or super fund will provide this policy and include it as part of your benefits. However, it’s important to remember that group life insurance isn’t tailored to your personal needs or budget, so it’s important to check what you are covered for under this type of policy.

In some cases, with life insurance through your super fund, the fund can claim their payments on tax, and, depending on how your contributions are funded, this may come from your pre-tax income.However, the downside is that any payouts or benefits received from your group life insurance policy may be taxed in some cases, particularly if you have not yet reached your retirement age under superannuation law.  

Income protection insurance

Although income protection insurance is a completely different type of cover, it’s often referred to as part of the life insurance market. This type of policy is designed to temporarily replace your income if you couldn’t work due to an injury or illness.

Is income protection insurance relevant for seniors?

If you and your family still rely on a stable income every month, then income protection insurance may be worth considering. This can help you stay on top of your everyday finances while you recover. However, many policies only offer cover to new customers up to age 60, and cover may expire at (or before) age 65.

If you don’t rely on a monthly income to meet your expenses, if you have retired, or if you have enough savings to cover your living costs if you are unable to work, then you might want to consider life insurance for peace of mind your family can cover the expenses if you were to pass away.

Cover the people that matter most

What is the difference between life insurance and funeral insurance?

Funeral insurance is designed to cover the cost of your funeral and other more immediate final expenses when you pass away. This works by paying out a lump-sum benefit to your family when a claim is made. While this can be a great way to help your family with funeral costs, it’s important to remember that funeral insurance offers a limited cover amount and isn’t designed to cover ongoing expenses such as living costs, rent/mortgage obligations, education, medical care, and so on.

More on funeral insurance >

How Australian Seniors can help

Seniors Term Life Insurance helps put you back in control of your family’s financial future, with up to $100,000 in cover right when it’s needed most.

Benefits of choosing Seniors Term Life Insurance

A flexible cover amount that suits you – choose how much you or your family will receive if you pass away or become terminally ill. You can set a benefit amount from $10,000 up to $100,000.

Cover for when you need it most. We know that the older you get, the more you have to protect. That’s why our cover is designed for people aged 45 to 79, protecting you for up to 20 years or until age 85, whichever comes first.

Immediate cover. Once your policy is set up, you’ll be covered straight away for death by any cause, and for terminal illness (excluding suicide for the first 13 months).

20% advance payout to cover funeral costs. When your family makes a claim, we’ll give them 20% of the benefit amount in advance, so they won’t have to worry about the cost of your funeral or other immediate expenses.

Triple payout for Accidental Death. Your family’s benefit amount will be tripled if you pass away from an accident, helping with any last-minute expenses they might face.

Easy to apply with no medicals. Simply answer eight questions about your medical history over the phone. Once approved, you can get covered in minutes.

We’ll keep your premiums manageable. Unlike some life insurance policies, your annual premium increase won’t be based on your age which will help with budgeting later in life. Plus, we offer lower starting premiums for non-smokers.

Your own Australia-based personal claims specialist. If you or your family need to make a claim, we’ll assign one of our local claims specialists to look after everything. No need to explain things to multiple people.

See more benefits

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Tools & Resources

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See how much a funeral could really cost in your area and why it's more important than ever to be prepared

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