If you’re looking for ways to help protect your loved ones, it’s worth considering life insurance. And if you’ve ever wondered, ‘How does life insurance work?’, here’s some useful information — from how to make sure your life insurance can be renewed, to what your family would need to do to claim this valuable benefit.
- It can be as easy as picking up the phone or applying online.
- When you apply for life insurance, you may be asked questions about your age, health and lifestyle. It’s important to answer these questions as accurately as possible; otherwise your claim may not be paid.
- Some life insurance providers may request you have a medical check before giving you life cover, and the results of this affect the cost of your life insurance premiums, or whether you can get cover at all.
- Some life insurance providers offer exclusions (e.g. in the case of a dangerous occupation), rather than making cover more expensive or declining cover.
- As long as you keep paying your life insurance premiums, your insurance will provide cover until you reach a specified age. And the younger and healthier you are when you take out life insurance, the cheaper it is likely to be.
- Generally, you won’t be asked for a medical check later down the track to keep your life insurance going.
- If you were to pass away, a family member would need to contact your insurance provider to make a claim on your life insurance policy. So it’s a good idea to give someone in your family access to your insurance policy information.
- Your life insurance provider will advise what information your family needs to supply to support the life insurance claim (e.g. access to medical records and death certificates). If the claim meets the conditions of your life insurance policy, your family could receive an advance payment of up to $10,000 to help pay any legal expenses.
After the claim has been approved, your family, estate, or beneficiaries will receive the full amount of the life insurance benefit payable on your policy as a tax-free lump-sum payout. When you set up your life insurance policy, you can usually choose the amount of cover you need. For example, with InsuranceLine you can choose an insurance payout between $100,000 and $1.5 million.