Question 1

What is life insurance and how does it work in Australia?

Accepted Answer

Life insurance is designed to help reduce the financial impact of death, serious illness, injury, or an inability to work. Life cover pays a lump sum benefit if you die or are diagnosed with a terminal illness, while TPD, Trauma and Income Protection can provide financial support in different circumstances.

Question 2

How much does life insurance cost in Australia?

Accepted Answer

Premiums depend on factors such as your age, health, occupation, smoking status, the amount of cover you choose and the insurer you go with. Because pricing can vary significantly between individuals and providers, obtaining a quote is a useful starting point, with the final premium determined through the insurer's underwriting process.

Question 3

Do I actually need life insurance?

Accepted Answer

If anyone depends on your income or you have financial commitments such as a mortgage, life insurance can provide financial support if something happens to you. Whether life insurance is relevant to you depends on your individual situation and any cover you may already have.

Question 4

What's the difference between life insurance, TPD, trauma and income protection?

Accepted Answer

Life insurance pays out on death or terminal illness. TPD (total and permanent disability) pays out if you become permanently unable to work. Trauma (critical illness) cover pays a lump sum if you're diagnosed with a specified serious illness or injury. Income protection replaces a portion of your income if you can't work due to illness or injury. They're often held together but cover different situations.

Question 5

Can I get life insurance through my superannuation?

Accepted Answer

Yes, many super funds provide default life insurance and TPD cover, and some also offer income protection. Members can often apply for additional cover through their fund. Cover through super can be a useful starting point, but it's important to understand how the level of cover, policy features and ownership structure compare with other options.

Question 6

What are the differences between holding cover inside and outside super?

Accepted Answer

Each has trade-offs. Cover inside super can be cheaper and easier on cash flow since premiums come from your balance, but it can reduce your retirement savings, and claims are paid to the fund trustee first. Cover outside super is paid for from after-tax income but offers more product options and pays out directly. Both approaches have advantages and disadvantages that many people compare when deciding how to structure their cover.

Question 7

How much life insurance cover do I need?

Accepted Answer

A common approach is to add up your debts (like your mortgage), ongoing living expenses for your dependants, and future costs like education, then subtract any savings or existing cover. A calculator can provide an estimate, while a licensed financial adviser can provide personal advice if you require a recommendation based on your circumstances.

Question 8

Are life insurance payouts taxed in Australia?

Accepted Answer

It depends on the type of cover, how the cover is held and who receives the benefit. Lump sum benefits paid outside super are generally tax-free, while benefits paid through super or income protection cover may have different tax consequences. Tax treatment can be complex, so professional tax advice may be appropriate if required.

Question 9

Do all life insurance policies cover the same things?

Accepted Answer

Cover is subject to the policy terms, conditions, and exclusions. What is and isn't covered can vary between insurers and products, so it's important to refer to the Product Disclosure Statement and policy schedule for details of your cover.

Question 10

Is life insurance advice regulated in Australia?

Accepted Answer

Yes. Life insurance advice is regulated in Australia, and advisers must be appropriately licensed and authorised to provide financial advice. Consumer protections are in place to help ensure advice is provided professionally and in accordance with regulatory requirements. test @123

Question 11

What's the difference between "own occupation" and "any occupation" TPD?

Accepted Answer

"Own occupation" TPD pays out if you can no longer work in your specific occupation, even if you could do a different job. "Any occupation" TPD only pays out if you're unable to work in any job you're reasonably suited to. Own occupation TPD generally provides a broader definition of disability than any occupation TPD and is typically more expensive.

Question 12

Will my health affect my application?

Accepted Answer

Yes, insurers assess your health history, along with your age, occupation, and lifestyle, to work out your premium and whether they'll offer cover. Being upfront about your health helps avoid issues if you ever need to claim.

Question 13

Will I need blood tests or a medical exam?

Accepted Answer

It depends on your age, the amount of cover you're applying for, and your health history. Higher cover amounts or certain risk factors may trigger a request for blood tests, a medical exam, or a report from your GP.

Question 14

Will a pre-existing condition stop me getting cover?

Accepted Answer

Not necessarily. Depending on the condition, insurers may offer cover on standard terms, apply a premium loading, add an exclusion, postpone a decision while further information is obtained, or decline cover. Outcomes vary between insurers and individual circumstances.

Question 15

Does smoking affect what I pay?

Accepted Answer

Yes, smokers typically pay significantly higher premiums than non-smokers because of the increased health risk. Most insurers classify you as a smoker if you've used tobacco or nicotine products, including vaping, in the last 12 months.

Question 16

What's the difference between stepped and level premiums?

Accepted Answer

Stepped premiums (also known as variable age based premiums) start lower but increase each year as you age. Level premiums (also known as variable premiums) generally start higher than stepped premiums, but may result in lower overall premiums over time depending on how long the policy is held and future premium changes.

Question 17

Are income protection premiums tax deductible?

Accepted Answer

Generally, yes. Income Protection premiums paid personally outside super are usually tax deductible, although individual tax circumstances may differ.

Question 18

Can I change my mind after applying?

Accepted Answer

Yes. Most policies come with a cooling-off period, typically between 14 and 30 days from when your policy starts, during which you can cancel your cover and receive a full refund of premiums paid, provided you haven't made a claim.

Question 19

Can I switch insurers without a gap in cover?

Accepted Answer

Often, yes. Many people keep their existing cover in place until replacement cover has been accepted and issued. Before cancelling an existing policy, it's important to understand any differences in policy terms, exclusions, premium structure, and underwriting outcomes, as the new insurer may assess you differently.

Question 20

What do I need to tell the insurer when I apply?

Accepted Answer

You need to disclose everything you know that could affect the insurer's decision to offer cover, including your health history, family medical history, occupation, income, and lifestyle. This duty of disclosure continues until the policy is in place.

Question 21

What if I need more cover later in life?

Accepted Answer

Many policies include a guaranteed future insurability or similar benefit, allowing cover increases after certain life events without full medical underwriting, subject to policy conditions. If this feature isn't available, you can apply for additional cover, which may require new underwriting.

Question 22

Who receives the payout if a claim is made?

Accepted Answer

For cover held outside super, the payout generally goes to the policy owner, nominated beneficiary (where applicable), or the estate, depending on the policy structure. For cover inside super, the payout goes to the fund trustee first, who then distributes it according to your nomination and superannuation law.

Question 23

What happens if I miss a premium payment?

Accepted Answer

Most insurers provide a grace period if a premium payment is missed. If premiums remain unpaid beyond the allowed period, the policy may lapse and cover may end. The exact timeframe varies between insurers.

Question 24

How do I make a claim?

Accepted Answer

If an event occurs that may be covered by your policy, contact your insurer as soon as possible. The insurer will explain the information and documentation required and assess the claim in accordance with the policy terms and conditions. If your cover was arranged through Keystone Life, we can also assist with a claims advocacy service to help guide you through the claims process and communicate with the insurer where required.

Question 25

How often should I review my cover?

Accepted Answer

Many people review their insurance when major life events occur, such as buying a home, having children, changing jobs or taking on new financial commitments. Whether your existing cover remains appropriate will depend on your individual circumstances.

Life Insurance FAQs

FAQ's

Still have questions?

When you're ready to talk it through, book a chat.

Life Insurance FAQs

FAQ's

Life insurance in Australia.

What is life insurance and how does it work in Australia?

How much does life insurance cost in Australia?

Do I actually need life insurance?

What's the difference between life insurance, TPD, trauma and income protection?

Can I get life insurance through my superannuation?

What are the differences between holding cover inside and outside super?

How much life insurance cover do I need?

Are life insurance payouts taxed in Australia?

Do all life insurance policies cover the same things?

Is life insurance advice regulated in Australia?

Getting covered.

What's the difference between "own occupation" and "any occupation" TPD?

Will my health affect my application?

Will I need blood tests or a medical exam?

Will a pre-existing condition stop me getting cover?

Does smoking affect what I pay?

What's the difference between stepped and level premiums?

Are income protection premiums tax deductible?

Once you're covered.

Can I change my mind after applying?

Can I switch insurers without a gap in cover?

What do I need to tell the insurer when I apply?

What if I need more cover later in life?

Who receives the payout if a claim is made?

What happens if I miss a premium payment?

How do I make a claim?

How often should I review my cover?

Still have questions?

When you're ready to talk it through, book a chat.

Life insurance in Australia.

What is life insurance and how does it work in Australia?

How much does life insurance cost in Australia?

Do I actually need life insurance?

What's the difference between life insurance, TPD, trauma and income protection?

Can I get life insurance through my superannuation?

What are the differences between holding cover inside and outside super?

How much life insurance cover do I need?

Are life insurance payouts taxed in Australia?

Do all life insurance policies cover the same things?

Is life insurance advice regulated in Australia?

Getting covered.

What's the difference between "own occupation" and "any occupation" TPD?

Will my health affect my application?

Will I need blood tests or a medical exam?

Will a pre-existing condition stop me getting cover?

Does smoking affect what I pay?

What's the difference between stepped and level premiums?

Are income protection premiums tax deductible?

Once you're covered.

Can I change my mind after applying?

Can I switch insurers without a gap in cover?

What do I need to tell the insurer when I apply?

What if I need more cover later in life?

Who receives the payout if a claim is made?

What happens if I miss a premium payment?

How do I make a claim?

How often should I review my cover?