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Frequently asked questions

• Q. Am I covered if I get fired?

  Insurance covers you for things you can't control, which is why you're not generally covered if you lose your job. After all, you can get another one. Having said that, many of Australia's insurance brands now provide combined cover for involuntary redundancy.

• Q. Do I really need insurance if I don't have a family or a partner?

  If you rely on an income to live, you may still want to protect this. Your income is your biggest asset so, just as you insure your car, you may want to consider income protection insurance (cover if you can't work for a temporary period of time) and TPD insurance (cover if you can't ever work again).

• Q. If I don't have a lot of money, what is top priority?

  If you have children or a family, it's hard to say which type of insurance is best. All four types of cover work together to provide you and your family with a safety net.

  However, if you're single, income protection insurance makes the most sense, as it ensures your biggest asset (your income) is protected. Still, it's worth getting all four types of cover while you're young and healthy to lock in the good rates. All that could change as you get older and the price will increase.

• Q. If I have a genetic test do I need to disclose it?

  In short, yes. This can seriously affect your premiums and lead to reduced coverage.

• Q. Can I insure my children?

  Child cover policies are available for any healthy child over the age of 2. The maximum you can insure your children for is $200,000. This would cover things like medical expenses and allow parents to take time off work should their child become seriously unwell.

Whether you need it

• Q. Do young people need cover

  • A. You may not want to pass on outstanding mortgage debt, personal debt or final expenses i.e funeral costs to your family and friends. What about income protection or TPD? If you suffer a serious injury and can’t work for a few months or ever again, what would you do then?

• Q. What about self-insuring

  • A. Most people are not fortunate enough to have adequate funds invested in a high-interest account that would be enough to cover their outstanding debts and give their family support for the future. With some life and disability claims reaching up to $2 million … it’s a fair wad of cash to just have sitting around!

• Q. Doesn’t health insurance cover illness and injury?

  • A. Not exactly. Health insurance covers medical expenses that are associated with sickness and injury but does not provide support for bills, debts or loss of income if you can’t work for an extended period or ever again. Life insurance covers the gap between the expenses covered by health insurance and additional costs of ongoing treatment, rehabilitation and loss of income.

Receiving a life insurance quote

• Q. How do you receive a quote?

  • A. You receive a quote for cover by entering your details in the form above. A certified insurance consultant will then call you to discuss different policy options and provide you with a preliminary quote based on these details.

• Q. Should I buy direct or use an adviser?

  Both buying direct and going through an insurance broker or adviser have pros and cons.

  Benefits of buying direct:

  • Cover can be put in place online over the phone quickly with no additional tests

  Benefits of buying with a broker:

  • They may be able to get policies you couldn't get by yourself
  • They can compare more options and assess for extras
  • They are able to liaise with the insurers, negotiate deals and find bargains
  • They can offer a wealth of advice and information, and answer any questions you have

Applying for cover

• Q. How much cover should I get?

  There are a few different ways to arrive at the right sum insured.

  Get an estimate from a self-assessment calculator. Calculators can help you add all of your financial obligations that would need to be covered in the event of your death. This may include mortgage/debt repayments, education fees and everyday living expenses.
  Consult your financial adviser or insurance broker. They can help you conduct a more detailed cost analysis to plan for your family in the longer-term and in more detail.

• Q. Who can apply for cover?

  • A. Australian and New Zealand Citizens, and Australian permanent residents (those residing in Australia at time of application). Age restrictions vary between brands and cover selected.

• Q. What if you already have cover?

  A. An insurance consultant can help you review your current policy to help you decide whether you can benefit switching to another option or increasing/decreasing the level of cover in your current policy.

• Q. Who is defined as a smoker?

  • A. Insurers class anyone that has smoked tobacco or any other substance in the last 12 months as a smoker.

• Q. Can you take out cover with your spouse/partner?

  • A. Yes. Generally, two people can be covered under a single policy. Discounts for multi-policies are offered by some brands.

• Q. What expenses will my family have to cover in my death?

  Typical expenses may include:

  • Short term expenses after death, including funeral costs and administration fees.
  • Income needs. The amount required to cover your family's living costs.
  • Mortgage repayment amount. If you have a mortgage then it's a good idea to factor in how much it will cost to repay.
  • Education costs for all of your children.
  • Retirement funding for your partner.

• Q. Can you add them later?

  • A. No, generally they will be required to take out a separate policy.

• Q. Do you need to do a medical or blood test when applying?

  • A. Most insurers will only require medical or blood tests at application if the insured has a pre-existing condition that needs to be assessed further. Additional evidence may be required in the event of a claim.

• Q. Can you get cover with a medical condition?

  • A. It depends on the condition and treatment. Every insurer has different conditions for pre-existing conditions so it is best to check the PDS before taking out cover. If the insurer decides that your pre-existing medical condition presents to great a risk for them, they will generally exclude it from cover. As an example if you are applying for cover and have a history of back problems, your insurer may exclude all claims related to back conditions from your policy.

• Q. What if your condition is not covered?

  • A. There are generally two options available to you:

  • It might be worth speaking with an insurance consultant to see if there are any other companies out there that are willing to provide you with cover. Assessment criteria varies between insurers so it's always worth looking around if you have struggled to get cover due to a medical condition.
  • You may also be able to have your current insurer review your condition when it comes time to renew your policy to see if the exclusion can be lifted if your situation has changed.

• Q. Will I have to take a medical or blood test?

  Some life insurance companies will require you to undergo medical or blood tests before you can sign up for cover. Generally however, you will only be required to undertake a medical or blood test if you are over a certain age or suffer from a pre-existing medical condition.
  Policies that do not require medical or blood tests are more aimed towards applicants with pre-existing conditions, ongoing medical issues or overall poor health.

  If you are in good health and do not have any pre-existing conditions then the most suitable policy for you is probably one which requires testing.
  If you are in poor health or have pre-existing conditions then you will probably not benefit from a policy which requires testing.

• Q. Stepped, level or hybrid premiums?

  You may have the choice of either stepped, level or hybrid premiums.

  Stepped premiums start off low but increase as you get older. This makes them more affordable in the short term, but considerably more expensive in the long run.
  Level premiums stay consistent over the course of the policy. These usually cost more at first than stepped premiums to begin with but actually work out to be cheaper over the course of the policy.
  Hybrid premiums combine both stepped and level. They will stay the same for a set period of time, and will increase in a set period of time. Different insurers offer different hybrid premium options.

Policy exclusions

• Q. When won't you be covered by your life insurance?

  • A. Generally all deaths are covered except for suicide within the first 13 months of the policy. Accident only life cover will only provide cover for death that is the result of an accident. Some policies may exclude death related to pre-existing medical conditions for a set number of years from the start date of the policy.

• Q. When won't you be paid for TPD, Trauma or Income Protection Cover?

  • A. Most policies will not pay a benefit for claims arising from;

  • Intentional self-inflicted injury or self harm.
  • Acquiring HIV, AIDS, Hepatitis B or Hepatitis C unless if through performing duties of the your occupation.
  • Disablement caused during engagement in armed forces of any country.
  • Claims related to pregnancy, uncomplicated childbirth or miscarriage.
  • Claims caused by your engagement in unlawful acts.
  • Claims from aviation activity unless you are a fare paying passenger on a scheduled flight.

Your policy

• Q. Can you increase or decrease your level of cover?

  • A. Yes. You can apply to increase or decrease your cover at any stage to meet your needs. It’s worth noting that you will be required to undertake another round of assessments with your insurer.

• Q. Can you add/remove beneficiaries from my policy?

  • A. Yes. You can update beneficiaries at any stage.

• Q. Can you cancel my policy?

  A. Yes. Most policies offer 30 day cooling off period whereby premiums paid during this period will be refunded. No premiums will be refunded if you cancel your policy after the cooling off period.

• Q. Do life insurance brands still offer surrender value for policies?

  • A. No. Life insurance is not an investment product and is designed to pay a benefit for death, terminal illness, injury or illness.

• Q. Are you covered overseas?

  • A. Yes. Most policies provide cover 24 hours a day anywhere in the world. Countries that have been advised against travel are generally not covered.

Making a claim

• Q. If you pass away, how is the claim paid?

  • A. In the event of your death, your life insurer or super fund trustee will pay out the nominated death benefit to one or more of your financial dependents or to your estate. A “binding nomination” can ensure the benefit from the cover in your super is paid to the beneficiary of your choice. You should make sure your estate has the necessary documentation so that they can claim on your behalf (see below).

• Q. How can you make sure that cover from my super fund is paid to your beneficiary?

  • A. If you have life insurance through your superannuation and are concerned about who will receive the benefit payment, you can make what is known as a binding death benefit nomination. A binding nomination allows you to nominate exactly who will receive what in the event of your death, essentially making your Estate Planning more certain.

• Q. Who can be nominated with a binding nomination?

  • A. A binding nomination can be taken out on;

  • Your current spouse.
  • Child of any age.
  • People that are financially dependent on you at the time of your death.

  The benefit payment can be distributed among the different beneficiaries provided you give details of the share you wish to be given to each beneficiary.

• Q. What does a beneficiary need to provide to claim a benefit from a deceased policyholder?

  • A. Generally, the beneficiary will need to provide:

  • A completed claim form.
  • Original policy document and policy schedule.
  • A copy of the deceased’s birth certificate.
  • A certified copy of the deceased’s will.
  • Probate or letters of administration.

• Q. Do you have to keep paying premiums if you make a claim for injury or illness?

  • A. If you claim for injury or illness on a life cover policy, your benefit will be reduced by the amount paid and your premiums adjusted accordingly.

• Q. What happens if you miss a life insurance payment?

  • A. If you're premiums are becoming to expensive or if you're going through financial hardship, there are options to freeze premiums for a short period of time. You should contact your insurer to discuss your options. If you don’t reach out to your insurer and your premiums go into arrears, you run the risk of your policy being cancelled.

• Q. How many people can you nominate to receive a benefit on your policy?

  • A. Most policies allow you to nominate up to five (5) beneficiaries on your policy.

• Q. What happens if you don’t nominate anyone to receive the benefit?

  • A. The claim will be paid to your estate.

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¹NobleOak Whitepaper: Life Insurance in Australia, Consumer Behaviour Transformation, January 2018.

*Average costs

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3. Based on a 2018 NobleOak survey of 1034 Aussies. Note: life insurance brands offer income protection insurance as a product)

Last updated: 1 July 2019