Looking to purchase life insurance online but don't know where to start? Find out how to get affordable cover online.
There are two main ways to purchase life insurance online. You can purchase life insurance from online either with:
What are the benefits of buying life insurance online?
There are a number of advantages to buying life insurance online.
- Fast comparison. Buying online eases the process of doing a life insurance comparison. Sites like finder.com.au enable you to compare hundreds of life insurance options to help determine the right cover option for you. You can receive multiple quotes very quickly and then weigh up the pros and cons of each policy. Shopping online also gives you access to online reviews, which can be a great source of information and consumer advice.
- Convenience when applying. The biggest advantage of buying online is convenience. The application process is quick and easy and it can be completed from the comfort of your own home.
- Lower your costs. Buying life insurance online also helps you avoid fees charges by brokers helping you save money on your life insurance cover.
Do I need a life insurance policy?
It doesn’t take a genius to realise that it’s impossible to predict what the future holds. While you may be in a strong financial position now, an unexpected tragedy can turn your world upside down in an instant. If you died and your income stopped coming in, your family would find themselves faced with an enormous financial burden. As well as funeral expenses to cover, there could be a mortgage to repay, debts to manage and the ongoing expenses of everyday life that always crop up.
This is why having a life insurance policy in place is a sound investment. It offers a safety net for your family if things do happen to go wrong. It offers peace of mind for you and your family, ensuring they won’t have to worry about finances should you die unexpectedly.
There are also other forms of life cover available to offer financial assistance at certain times, such as when injury or illness keep you out of the workforce or if you become permanently disabled.
How much life insurance do I need?
Finding the right level of cover for you will depend on a range of factors. In order to determine how much life insurance you need, start by examining the expenses your family would have to cover if you were no longer around. What debts (i.e. the mortgage) will need to be paid off? What regular ongoing expenses (school fees, utilities) will need to be managed? How will your family cope without your regular stream of income?
You’ll want to take out enough cover to ensure your family will be able to maintain their current lifestyle even if you’re not around. You’ll need to take into account:
- How many dependents you have. How old are they and what sort of expenses do they attract?
- How much outstanding debt you have. Has your mortgage been paid off? Do you have credit card debts or other outstanding personal loans? You’ll need enough cover to make sure your family doesn’t end up under a mountain of debt.
- How much your regular expenses are. This means things like fuel, utilities, car insurance, council fees and the like.
- Funeral expenses. Not only is saying goodbye to someone you love incredibly emotionally painful, it’s also not cheap. You’ll have to account for funeral expenses, legal costs and possibly medical expenses.
- How much income will be coming in. Your family will no longer have access to your steady stream of income, but also take the time to consider whether your spouse will still be able to contribute their current income to the household. They might have greater family responsibilities (cooking, cleaning, school pick-ups, etc.) to look after once you’re gone, resulting in a reduced amount of time to work.
Take these factors into consideration to work out a suitable benefit amount, and make sure your policy is indexed to reflect the rising cost of living in the future.
What are the different types of policies available to buy online?
- Life cover. This type of cover provides a lump sum benefit payment if you die or are diagnosed with a terminal illness. It’s designed to help lessen the financial impact of your death on your family.
- Total and permanent disability (TPD) insurance. TPD cover provides a lump sum payment if you become permanently disabled and are unable to work again. It’s designed to help cover the loss of your regular income.
- Trauma insurance. If you suffer a serious medical event, for example a heart attack, cancer or a stroke, this type of cover offers a benefit to help you meet medical costs, rehab expenses and ongoing living costs.
- Income protection. Income protection insurance is designed to offer a replacement income if injury or illness keeps you out of the workforce. It insures you for up to 75% of your regular salary, helping you keep on top of ongoing expenses and debt repayments.
- Funeral insurance. This type of cover is designed to help your family look after your funeral arrangements when you die. It offers a lump sum benefit to take care of the costs involved.
Things to consider when buying life insurance policies online
There are a number of factors you must take into account when choosing life insurance online. The first thing you need to do is carefully consider your life insurance needs. Why are you buying cover? Do you want to protect your family financially in the event of your death, or are you looking for insurance to cover you in the event of a serious illness? Whatever the case may be, closely examine your needs before buying cover.
The next step is to determine how much cover you will need. For help with this, see the above section, ‘How much life insurance do I need?’
Once you know what type of cover you need and how much, it’s time to start shopping around to find suitable cover. Don’t simply select the first policy you find; shop around to find a policy that offers adequate cover at an affordable price. Use finder.com.au’s comparison tools to rate different products against one another and always make sure to read each PDS closely to get a clear understanding of what is and isn’t covered.
There is no shortage of insurance providers on the Australian market, so deciding on which insurer to go with can be a daunting task. Look for a respected and reputable provider with a solid history in the industry, one that offers financial stability and has a friendly and professional customer service team.
It’s also vital that you remember to review your policy whenever your circumstances change. Doing so will guarantee that you don’t end up under-insured.
Things to understand and watch out for when buying life insurance online
There are a number of factors that can influence how much your life insurance premiums will cost. These include:
- Your age. The older you are, the more prone you are to suffering certain illnesses and you will generally take longer to recover. As a result, premiums increase as you age.
- Your gender. Women are generally considered by insurance providers to claim more often than men. This assumption is based on the fact that women have to deal with conditions like breast cancer and complications stemming from pregnancy.
- Your occupation. If your job regularly exposes you to dangerous situations, you will have to pay a higher premium.
- Your smoking status. The huge range of health conditions associated with smoking are well known, so if you smoke you can be sure that you will have to pay more for your cover.
- Your alcohol consumption. The more you drink on a regular basis, the higher your premiums will be.
- Your hobbies and pastimes. If you engage in high-risk activities such as extreme sports, don’t be surprised to find you’ll have higher premiums than other people.
- Your health status and any pre-existing medical conditions. If you’re generally healthy, you can expect to pay less than those with pre-existing medical conditions or a history of illness.
There is a common misconception that those with pre-existing medical conditions will not be able to find cover, but it is possible to find affordable life insurance even if your medical history isn’t unblemished. The important thing to remember is to never withhold information from your insurer. Be upfront and honest about everything right from the start, because if you fail to do so your claims could be rejected and your policy cancelled.
Be wary of life insurance offered with a low-cost premium, as the cost of many of these policies will increase over time. You may also need to decide whether to take out a joint life insurance policy with your partner or separate policies. Speak to an insurance consultant if you’re unsure about a good option for you.
How to compare life insurance online
Once you’ve identified what type of cover you require and how much you need, you’ll also have to calculate your budget. How much can you reasonably afford to pay for life insurance premiums? You’ll also need to consider whether it might be worthwhile finding a policy for your spouse and children.
The next step is to do your research and shop around. Obtain multiple quotes from several providers, making sure to compare not only the cost but also the features and exclusions of each policy. Make sure you know exactly what each policy covers (and to what limit) before you make your final decision.
Top tips for buying life insurance online
- Read the PDS. Always read each policy document closely to ensure you know exactly what is and isn’t covered.
- Ask questions. Don’t be afraid to contact insurance providers and ask for clarification if there’s anything in a policy you don’t understand. It’s much better to take the time to do this now than to find out you’re inadequately covered in the future.
- Check your super. Your superannuation fund will offer you insurance benefits, so check what they are before you take out cover that may be unnecessary.
- Disclose everything. If you don’t answer all questions truthfully during the application process or if you withhold information, your policy will be void.
- Inflation protection. Check that your policy is indexed to increase your level of cover and keep pace with inflation.
- Guaranteed renewability. Check that the policy you choose is guaranteed renewable so your provider can’t cancel it without your consent.
- Discuss your needs with your family. It may be a conversation many would feel more comfortable avoiding, but having this talk can help you better understand your insurance needs.
- Change your lifestyle. You can reduce your premiums by getting in shape, quitting smoking and drinking less.
Frequently asked questions when buying life insurance online
- How much life insurance do I need? Determining how much cover you need will require you to assess a number of factors. These include the number of dependents you have, how much debt you have and what regular expenses you need to take care of.
- How long does it take to get a quote for life insurance? The process is simple and straightforward, with most providers offering a quote within a few minutes. However, you may then have to provide more details about your lifestyle and medical history before you can take out cover.
- What factors can influence the cost of my premiums? Insurance providers will take into account factors like your age, gender, smoking status, medical history and occupation before determining how much to charge you for premiums.
- Where can I compare life insurance policies? Finder.com.au is the perfect place to compare a huge range of life insurance policies. Weigh up the pros and cons, benefits and exclusions of each policy before taking out cover.
- What if I don’t want to buy online? If buying life insurance online seems too daunting and confusing for you, seek the advice of an insurance consultant or adviser. They will be able to help you find cover tailored to your needs.
Life insurance is a sound investment that protects your financial future. It offers peace of mind and security that you will be protected if the unexpected happens and you die or suffer a serious illness or injury. You can buy life insurance online from a huge range of insurance providers, but make sure you do your research and shop around to get a good deal.