Do I Need Life Insurance?

Looking to apply for life insurance but not sure what type you actually need? Find out what's available

Figuring out the type and just how much life insurance you need can be confusing at the best of times. As we enter different stages of our life it is important to consider different types of insurance to ensure you and your loved ones are protected from unforeseen losses.

What types of life insurance are available in Australia?

  • Life cover. Life insurance provides a lump sum benefit in the event of death or terminal illness.
  • Income protection insurance. Income protection offers an ongoing benefit of 75% of the policyholders regular income if they are forced to take time off work due to illness or injury. This benefit is usually paid monthly.
  • TPD insurance. Total permanent disability (TPD) insurance provides a lump sum benefit if the policyholder suffers a disability as defined in their policy.
  • Trauma insurance. Provides a lump sum benefit if the insured suffers a medical trauma that is specified in their policy. Most policies will cover up to 50 different conditions including:
    • Stroke
    • Cancer
    • Heart Attack
  • Funeral insurance. Funeral insurance provides a lump sum benefit to cover funeral costs and other outstanding expenses. The maximum amount of cover that can be taken out is usually about $30,000.

When should I take out life insurance?

AgeLife eventsFinancial obligationsTypes of insurance to consider
  • Start full-time work
  • Move out of home
  • Start accumulating wealth
  • Everyday living expenses
  • Small personal debt
  • Income Protection
  • Increase in income
  • Purchase house
  • Increase in short-term debt
  • Marriage
  • Children
  • Short term debts
  • Spouse and children
  • Everyday living expenses
  • Mortgage
  • Life cover
  • Income protection
  • TPD
  • Trauma
  • Increase in earnings
  • Reduction of debts
  • Outstanding mortgage and personal debt
  • Investments
  • Everyday living expenses
  • Retirement fund
  • Life cover
  • Income protection
  • TPD
  • Trauma
  • Maximum earnings
  • Preparing for retirement
  • Less financial commitments as children move out
  • Outstanding mortgage and personal debt
  • Investments
  • Everyday living expenses
  • Retirement fund
  • Life cover
  • Income protection
  • TPD
  • Trauma
55 and Over
  • Protecting wealth accumulated
  • Retire from full-time work
  • Finance lifestyle with savings
  • Everyday living expenses
  • Any outstanding debts
  • Medical costs
  • Funeral Costs
  • Life Cover
  • Trauma Insurance
  • Funeral Cover

Different types of cover at different life stages

Everybody is different and cover requirements will change based on the events you encounter at different life stages. Its worth reviewing your life insurance every year to ensure you have enough cover in place. The graphic below gives an overview of key times to take out cover in different life stages.

Life Insurance States Graph

Do you still need life insurance if you're retired?

It is natural for the need for life insurance to reduce once people enter their retirement years and their financial obligations change. You may wish to decrease the amount of cover you have in future years but still have some in place to:

  • Provide a legacy to your surviving children in the event of your death
  • Cover funeral expenses
  • Tie up any final expenses such as legal fees or taxes

It is worth taking into consideration existing assets that may be used in the event of your death such as:

  • Superannuation
  • Savings
  • Property
  • Other assets such as car, contents

Do you need cover if you're young?

You may not require life cover at this stage but may want to consider funeral insurance to cover the cost of your funeral or TPD, Trauma or Income Protection to provide you with an income if you suffer a serious injury or illness.

Steps to determine sum-insured required


Find the right life insurance for your situation

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Coverage is the amount of money that you will be paid in the event of a claim. An insurance consultant can help you determine an appropriate amount. Calculator
Provides a lump sum payment if you become totally and permanently disabled and are unable to return to work.
Provides a lump sum payment if you suffer a serious medical condition. Cover can be taken out for 40-60 medical conditions depending on the policy you choose.
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Compare Life insurance quotes from these direct brands

Rates last updated September 20th, 2017
Product details Maximum cover Maximum Entry Age Cooling-off
Life Insurance
Life Insurance
Choice of cover options and flexible premiums to suit budget. No lock-in contracts and fast application. $1,500,000 65 30 Get quoteMore info
Life Insurance
Life Insurance
Get flexible life insurance up to the sum of $2,000,000. $2,000,000 59 21 Get quoteMore info
Real Family Life Insurance
Real Family Life Insurance
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™ . $1,000,000 64 30 Get quoteMore info
Term Life Insurance
Term Life Insurance
A simple life insurance product that can offer up to $1,500,000 in a lump sum payment on death or diagnosis of terminal illness. $1,500,000 69 30 Get quoteMore info
NobleOak Term Life Insurance
NobleOak Term Life Insurance
Get a quote for up to $15 million in life insurance cover. Cover can be tailored to meet your personal needs. $15,000,000 69 30 Get quoteMore info
Woolworths Life Insurance
Woolworths Life Insurance
Receive a discount of 10% on life insurance as a Woolworths Rewards Member. T's and C's apply. $1,500,000 65 30 Get quoteMore info

Maurice Thach

An insurance savvy publisher for who loves finding an answer to the question "Am I covered for ________?"

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