Find out how Life Insurance works, check what’s covered and figure out how to renew and make a claim.
If you’re looking for ways to help protect your loved ones, it’s worth considering Life Insurance. If you’ve ever wondered how Life Insurance works, here’s some useful information.
By finding Life Insurance cover that suits your circumstances, you’ll be investing in greater financial security and peace of mind for yourself and your loved ones.
What does Life Insurance cover?
Life Insurance will pay out a lump sum to your dependents in case of your death. All causes of death are covered, except suicide or death caused by self-harm within the first 13 months of your cover.
What doesn't Life Insurance cover?
Life Insurance policies have inclusions and exclusions that you should check before purchase. Suicide and death from self-harm are not covered within the 13 months of your Insuranceline policy; if anything else is not covered (for example, based on dangerous hobbies or pastimes you participate in), we will let you know before your cover starts.
Life Insurance terms explained
Life Insurance can seem confusing since there are several terms you might not be familiar with. Here’s a brief explainer of terms you may come across:
- Premiums—this is the money you pay on a monthly or annual basis to keep your up-to-date insurance cover. Premiums can vary depending on your level of cover and age.
- Additional cover—depending on your preference, you can opt for additional cover like Cancer Cover or Major Illness Cover when you purchase Life Insurance. These types of cover will make sure your loved ones receive a lump sum in a wider range of circumstances.
- Beneficiary—this is the person (or the people) who will be receiving the lump sum from your Life Insurance. This is up to you, and may be your spouse or your dependent children.
Life Insurance helps protect your family when they need it most—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, occupation health and lifestyle. It’s important to answer these questions accurately; 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 may 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.
How Life Insurance renewals work
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.
How making a Life Insurance claim works
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 and the payout will generally be tax-free. 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.
Is Life Insurance a good investment?
If you have financial dependents, then Life Insurance may provide valuable peace of mind, allowing you to continue your life in the knowledge that your loved ones will be taken care of when you’re gone.