Life Insurance Australia: How is the Australian Insurance Market Different?

Information verified correct on September 27th, 2016

The Growth of Life Insurance in Australia

As of September 2012, Australia's life insurance industry is already 179 years old. If compared to a person's life, the insurance industry has indeed lived a very long and full life - one that has seen everything well.

The life insurance industry in Australia started in 1833 when Alliance Assurance, a company which is today known as Aster on, sold its first insurance policy to the Attorney-General of the Supreme Court of Tasmania named Joseph Tice Gellibrand. From this same policy, the first claim was also made in 1837.

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After 179 years, the life insurance industry has seen many changes and developments. And from a single life insurance company, there are now more than 20 well-established life insurance companies all over Australia offering various types of insurance policies for your needs.

With this influx of different types of insurance companies in the Australian market, the life insurance industry of Australia has become dynamic and competitive as the costs and organisational structure continue to change to keep up with the changing times and needs.

Despite these changes, however, there are still some basic things that remain unchanged that still makes the industry uniquely and distinctly Australian. These include love for life, family, friends, and football and cricket. These things characterise who Australians are and what they value most in life.

It reflects how important family and friends; while the love for sports reflect the zest and resilience Australians have - characteristics that show optimism and toughness even in the most trying of times. However, these characteristics can sometimes border on stubbornness especially where insurance is concerned. The attitude that we can take anything and still strongly maintain, is that despite the cuts and bruises, Australians disregard insurance most of the times.

We should realise that these cuts and bruises can be something worse especially at times when we least expect them. Thus, proper protection against such unexpected things must be in order. It is better to survive with a few minor cuts and bruises than surviving with a major surgery that can leave you reeling emotionally and financially.

Life Insurance Options for Australians

It might be surprising to learn that despite the long history of insurance in Australia a lot of Australians are still uninsured or underinsured. Optimism can take you through the tough times, but it can do more if you are well-prepared and life insurance offers that option.

It should be noted that despite the changes in the life insurance industry, it has remained faithful to its mission - to provide peace of mind through a wide range of insurance options for each need. And looking at the history of insurance, it has come a long way from the whole life insurance policies it has offered at the beginning. Now, you can choose from various policies and products.One of the most popular life insurance products is term life insurance because of the flexibility and affordability it offers to those who are seeking cover. With term life insurance you can choose from as low as 5 years to much longer as 30 years. Some insurance providers even offer coverage up to 99 years.

Term life insurance is sometimes called death only cover because it pays your loved ones a lump sum payment when you die. The money can then be used to pay for any final expenses your family might have upon your death, such as funeral and medical expenses, mortgages, and death. It will help them with the emotional transition without worrying too much about the finances. Aside from this, other popular insurance products available to Australians are income protection, trauma insurance, and TPD insurance.

Income Protection

Instead of paying you a lump sum benefit, income protection insurance pays you a monthly benefit that is equal to 75% of your monthly gross income. This is paid to cover you for any income loss that might happen if you are unable to work for a certain period of time because of an illness or injury.

Income protection has a waiting period which is between 14 days to 12 months. This is when you have to wait before receiving the benefits after a claim. As a general rule, the longer the waiting period is the lower the premium you pay.

TPD Insurance

Another popular insurance product is TPD or total and permanent disability insurance. As the name suggests, you receive a lump sum benefit from this type of cover when you become permanently and totally disabled from injury or illness. However, you should be careful when drawing out this type of policy as there are two types of TPD insurance - any occupation and own occupation.When you have any occupation TPD insurance, you receive a benefit if you cannot perform any job whereas, own occupation pays you when you cannot perform the job you have been trained or skilled to do.

Trauma Insurance

Each insurance product has a distinguishing feature and in the case of Trauma insurance, it pays you a benefit upon diagnosis of a critical illness. The definition of critical illness depends on each provider but generally, it includes cancer, stroke, and heart diseases. To date there are at least 40 types of critical illnesses that you can seek cover for in this type of policy.

The Importance of Life Insurance Quotes

All members of a modern society owe it to themselves and their dependants to ensure they have enough financial support available to look after them and their loved ones should the unthinkable occur. The state will provide a basic level of sustenance but this is either near or below the poverty level. To be able to continue to share in living† the same life you have previously enjoyed you have to take certain steps to make sure neither you, nor your family members who are dependent on you, suffer financially when you're removed from the scene through death, injury or illness. The best way you can ensure life goes on as before, at least on the financial side of things, is to compare life insurance Australia style by obtaining life insurance quotes, Australia life insurance quotes in particular. This is because some life insurance policies such as, Whole of Life, Endowment and Universal policies are no longer available in Australia.

How Superannuation has changed the Australian Life Insurance Scene

The removal of some of these life insurance policies from the Australian scene has resulted from Superannuation being made compulsory for all employees working in Australia. This has seen compulsory savings towards retirement. Term life insurance is used to cover employees should they die before retirement or become disabled to the extent they can no longer earn their own income. People who are not employees still have to make their own arrangements through personal superannuation or individual insurance policies.

Although superannuation funds are widely used throughout the country to cover all employees, many fund members are under insured because they have taken on more debt than others. All people are different and where one person may have quite satisfactory cover under their company's superannuation fund, a fellow employee working alongside him or her doing exactly the same job may be dangerously under insured. This can occur because of many factors, one of the most obvious being when one employee is renting the family home and another has a mortgage, or when one has an expensive motor car under hire purchase and the other a paid for old bomb etc. The best way to overcome these anomalies is to thoroughly go through all your living expenses and find out exactly how much money you and your family would need to live on should you be unable to provide it yourself. You then have the task of finding the right extra cover for the right price and this can be done in the following ways:

  • Life Insurance Quotes Australia. One of the best ways to ensure you get the best life insurance quotes from Australian companies is to engage the services of a professional adviser but if you want to go it alone you can do so as long as you: (1) properly consider the total amount of benefit you need, (2) the amount of premium you're prepared to pay to get that level of protection and (3) the length of the term you want the cover for. All you then need to do is to put these answers to each life insurance company you've chosen to deal with and evaluate the quotes you get in return. The quote you receive will also include whether you have chosen to pay the premium cost via a stepped or level premium repayment structure.
  • Tips to get the Right Deal. Before you begin comparing policies and asking for quotes you should make yourself aware of the differences between underwritten and direct life insurance policies. (1) Direct policies are the ones you most likely see advertised. They ask few questions and require no medical examination. Although easier to get they are usually more expensive. (2) On the other hand underwritten policies will require more information about you, your health and your employment as well as require a medical examination but when satisfied of your risk, usually insure you at a lower premium cost.
  • Tips for Life Insurance Comparison Australia. Life insurance is one area where you can't take the advice of a friend or colleague on the amount of premium you'll be expected to pay for any given amount of cover. This might be alright on a general basis but in reality we're all different and where one person might be required to pay an extra premium in the way of a loading because of some perceived risk, another might not. Each person is taken on a case by case basis and a lay person isn't qualified to advise of the likely premium you'll be asked to pay. The only person who can do this is a life insurance company's actuary. Therefore, you can't assume your premium will be higher than another person's because of your past history. It may be but it may not, the actuary will make this decision based on the experience within his or her company. The actuary will take into account such things as; your age; your gender, health - any pre-existing health conditions; your recreational pursuits; if you are a smoker or not and if you have been a smoker how long it's been since you gave up the habit.

Benefits of Taking out Life Insurance in Australia

Despite the general optimism of Australians, it still pays to be ready. In fact, in 2010 alone, there were a total of $3.5 billion life insurance claims paid to 61,000 people. It goes to show how vulnerable anyone can be against the uncertainties of life. Just imagine what impact an injury or illness can do to your finances if you are not ready for it. With life insurance, you reap lots of benefits more than the peace of mind.

  1. It gives you the power of choice. Knowing that you have some financial back-up, you can choose the best treatment and specialist available and convenient for you.
  2. It helps you adjust your lifestyle smoothly. Dealing with an injury or illness is difficult enough. Dealing with it with limited financial capabilities makes it even more difficult. With insurance, however, you will be able to make the adjustment much better because you have some money at your disposal to make the necessary lifestyle changes.

Your love for life and your family should be the motivating factor to take up insurance for yourself. By having and insurance policy, you are protecting both you and your loved ones against the difficult blows that can happen in your life.

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Details Features
Life Insurance
Life Insurance
Choice of cover options and flexible premiums to suit budget. No lock-in contracts and fast application.
  • Benefit payment of up to $1,500,000
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Term Life Insurance
Term Life Insurance
Receive up to $1,500,000 in life cover and pay nothing for the first month. 10% Multi-life discount available.
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Term Life Insurance
Term Life Insurance
Save 25% on NobleOak life insurance and pay no premium for your first month.
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  • Available for applicants up to 69 years old
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