Life Insurance: How Do You Know You’re Getting Your Money’s Worth?

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Many Australians have probably signed agreements with their insurance providers and skimmed through the terms and conditions. It’s only natural, but it isn’t wise. When something is as important as life insurance, it is essential to ensure you’re getting the right deal for those monthly premiums. So, how do you get your money’s worth?

When faced with the question, most people will likely tell you to research and compare providers. However, nobody really explains what to look for. Of course, doing it is a great idea, but it’s always nice to have a little more understanding. Today, we are going to provide a short, comprehensive guide that explains what it should cover, what to look out for, and how much Australians should be paying for their life insurance policies.

What a good life insurance policy should cover

We are all aware that life insurance is there to provide financial support to our loved ones should we pass away, but can it give us more? Yes, there are plenty of Australian life insurance packages that can cover much more.

We like to think that a good life insurance policy should cover at least the following:

  • Death cover and advanced funeral expenses – A large lump sum payment to beneficiaries and to pay funeral costs to relieve loved ones of any financial burden.
  • Total and Permanent Disability (TPD) – TPD offers Australians a lump sum if illness or incident means they can no longer work.
  • Income Protection – This replaces a portion of your salary every month if you cannot work.
  • Trauma and critical illness – Payout a lump sum when diagnosed with a critical illness.

Is there such a thing as too much insurance?

Unfortunately, yes. Some insurance providers in Australia will try to give you policies you don’t really need to charge a higher premium. It is essential to stick with a reputable provider and read those terms and conditions.

How much should Australians be paying for life insurance?

The answer to this question isn’t entirely straightforward because it comes down to multiple variables. However, when purchasing life insurance in Australia, there are a few primary factors that will affect the costs.

  • Age – Generally speaking, the older you are, the more your premiums will creep up.
  • Health – If you have a preexisting health condition or a problematic family history, this can also increase the cost.
  • Lifestyle Choices – You are much more likely to pay less if you eat well, exercise, and don’t drink or smoke.
  • Vocation – Any risks involved in work can also impact the price.
  • Level of cover you want – If you want the best, you will need to pay for it.

To give you an idea, a healthy, non-smoking Australian in their early thirties should expect to pay anywhere between $20-40 each month for a basic policy.

To round it up

Australians without life insurance should definitely consider getting a policy that covers the essentials we mentioned above. If you live a relatively healthy lifestyle, it doesn’t break the bank and is great for peace of mind. However, use a company with a good name for itself and avoid paying for things you don’t need.

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