Enjoy peace of mind with life insurance

There's some security to having life insurance in place to protect your family or income.

Who can put a price tag on the well-earned peace of mind you get with life insurance? People often puzzle over whether to get life insurance or not. Retirees and middle-aged moms think critically about the costs vs the benefits.

Essentially, it simply comes down to an individual question: “Would my untimely passing lead to a financial strait with any of my loved ones?” If you are thinking yes, it is the right time a life insurance policy.

Life insurance gives the much-needed facet of peace of mind to your life, and you might even live longer without the stress. How wonderfully ironic!

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Why have life insurance?

The most obvious reason that most of us know is that life insurance can be used to pay the funeral expenses – a fact that is just being looked over or put off. However, there are several other areas where the life insurance benefit can be spent and used. Here are some ways how you can use life insurance other than your funeral expenses:

Mortgage payment

Your house is your own personal sanctum. The need to protect your home is a very primeval instinct and a very important one. It is, like life insurance, one that is often overlooked.

Some insurance providers gives you the option to get mortgage life insurance that matches the number of years left on your mortgage; while some policies offer a decreasing benefit where the death benefit goes down with the mortgage balance. In short, the movement of your premiums is concurrent to your debt.

However, a term or whole life insurance policy can also be used to pay off the balance of the mortgage. It is best to analyse your personal situation to decide which option is best for you and your family.

Income protection

In addition to making sure that your loved ones are not left homeless, your life insurance policy can also replace the income that is lost when you die. With the growing needs of the family most households today are two-income households.

There is both an advantage and a disadvantage here. It could provide a lot of income stream to the family; but if one of you passes away, the household suffers a loss of that additional income leaving the family make drastic changes to their lifestyle.


In addition, life insurance money can be used to fund your children’s college education or pay outstanding debts. Basically, whatever type of life insurance policy you purchase should protect your family financially in every way in your absence.

Who needs life insurance and who qualifies?

One good practical rule to live by is that if you’re an adult earning income, you need to life insurance that will keep going until your small child is out of college. If you have big financial obligations like a mortgage or huge credit card debt, then that debt will be covered if you die. Death benefits on life insurance packages do not get federally taxed, and financial planners usually use them to pay off estate taxes that are created after someone in the family dies of an untimely death.

  • Determining if you meet qualification standards and criteria is based upon the results of a medical examination, medical history, credit score, alcohol use, and driving history. Your lifestyle will determine if you qualify or not. Your health will also play a role.
  • The two top ways that life insurance companies tabulate the amount of insurance a person can get is based on the human-life approach and needs approach. The former is based on the expected income a person will make throughout the course of his life expectancy. The latter is based on continual and odd expenditures that may come up.

Term life insurance

Term life insurance is pretty simple and straightforward. It pays a predefined lump sum should the insured person dies within a set amount of time. With the insured person's death, term insurance will dole out the surface value of a policy out to the beneficiary on the policy. Every premium that is put forward is used to go to pay for the cost of insurance protection.

A term life insurance policy can last between one and 10 years, but it can go up to 20 years. They are relatively cheap, coming in at just about $30 for someone in his mid-thirties that doesn’t smoke. The top characteristics pertaining to term life insurance are the following:

  • Cheap
  • Zero cash value
  • Renewable after the term expires
  • Sometimes can be converted to a permanent life insurance policy package

Permanent life insurance

Permanent life insurance gives protection for life, but you have to pay all the premiums in a timely fashion. It doesn’t expire either, and it is often linked up with either a savings or investment account that can be joined with the insurance protection. This addition makes premiums go higher, but it’s worth it.

The main features of permanent life insurance are the following:

  • Permanent protection for life
  • A lot more pricey to keep
  • Stores up cash value for a rainy day
  • Loans can be taken out with the policy
  • Good tax treatment on policy earnings
  • Stable premium levels
Permanent Life Insurance is no longer available in Australia. You may like to compare Term Insurance options.

Concluding tips

There are a few tips and tricks you can utilise to get maximum insurance coverage. Consider getting a certain threshold level, called a break point, of insurance because better premiums are offered at flat amounts of $200,000 or $1,000,000.

Make sure that a premium is certain not to increase the life of your policy too. Don’t fall head over heels with riders, either, sometimes they’re not worth the cost.

When purchasing insurance, don’t rush into getting the most expensive premium permanent life insurance possible. Consider if a term life insurance policy will meet your needs. Protect your family in case of a sudden death so that they’ll have peace of mind too.

Make an inquiry to take out life cover today

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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

Name Product Maximum cover Maximum Entry Age Minimum Sum Insured Guaranteed Future Insurability Expiry Age Short Description
No expiry age as long as premiums are paid
First month FREE when you take out Real Family Life Cover. Available for a limited time (T&Cs apply).
Receive a 10% discount on the second person when two applications are submitted at the same time, and both policies are issued.
Choice of cover options and flexible premiums to suit your budget. No lock-in contracts and fast application.

Tailored life insurance so you know what you're covered for upfront. Take out a policy and get a $100 bonus gift after holding cover for 2 months. T&Cs apply. Ends 31 March 2019.
No expiry age as long as premiums are paid
Cover up to $1.5 million with Guardian Life Insurance.
No expiry age as long as premiums are paid
Receive one month's premiums off every year if you pay annually upfront. T’s and C’s apply.

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Maurice Thach

An insurance researcher and writer for finder.com.au who loves finding an answer to the question "Am I covered for ________?" Maurice has also completed a Tier 1 Life Insurance and a Tier 2 General Insurance Certification under ASIC's Regulatory Guide 146. This means he can confidently provide general advice for life insurance and non-life insurance products.

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