Checklists for comparing life insurance policies

Comparing life insurance policies made easy with a step-by-step process.

If you’ve been putting off getting life insurance, it might be a good time to think about considering your options. Life insurance can offer peace of mind that your family and loved ones are protected financially should anything happen to you.

The whole idea behind life insurance is to ensure the people you love are taken care of when you’re no longer able to. They won’t be stuck with hefty bills or repayments on debts they can’t afford, as these things will be taken care of as part of the policy.

Before you choose a policy, though, take some time to compare the policies available. It’s also wise to think carefully about the amount of life insurance you need.

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Determine how much life insurance you will need

In an effort to keep policy premiums to a minimum, many people end up under-insured. Always check what amount you’re insured for and then work out whether this will be enough to cover your family financially.

For example: at a bare minimum you may need to opt for cover that will repay the outstanding debt on your home mortgage and any other outstanding debts you have. However, this won’t provide your family or loved ones with anything else.

You might want to consider adding a little more to the life insurance benefit amount that could be invested to provide some supplemental income for your family.

Make sure you double-check your life insurance policy

Always double-check the inclusions and conditions listed in the policy. Not all insurance companies will have the same list of conditions for paying out your life insurance benefit. Some may exclude certain types of accident or even exclude pre-existing injuries of conditions.

It’s wise to ensure you and your family are protected as best you possibly can be, so ensure you understand the terms of the policy you’re thinking about.

If you intend to compare life insurance policies accurately, it’s important you’re comparing the same inclusions and conditions, but also the same exclusions.

Getting enough cover within your life insurance policy

Many life insurance policies also include a Permanent Disability component, which is designed to still pay you if you become disabled and are unable to work. Some may also include trauma insurance and temporary injury cover to cover short term financial needs.

There’s also the consideration of whether you should include personal income protection insurance or not.

Income protection insurance is ideal for covering any lost income due to illness or injury while you’re away from work. Unfortunately, far too many people feel they don’t need this level of cover, as they feel that their employer’s Work Cover policy will cover them in the event of an accident at work.

What those people might not realise is that a much higher percentage of accidents and injuries occur outside of the work place – on your own time. If you were suddenly unable to work for three or four months while you were recovering from an injury, would you be able to cover your mortgage payments and other associated living expenses? You certainly could if you had the right income protection insurance.

Life insurance general exclusions

Regardless of whether you’re shopping for life insurance or another form of cover, every policy has its own list of exclusions. Exclusions are coverage restrictions that apply to your policy, so familiarising yourself with this list is important to ensure you know exactly when your policy will and won’t provide cover.

Typical exclusions you’ll find on a life insurance policy include:

  • Pre-existing medical conditions. The treatment of medical conditions varies from one insurance provider to the next. While some companies cover pre-existing conditions others don’t. In the latter circumstances, if your death is the result of a pre-existing medical condition, your benefit will not be paid.
  • High-risk occupations. While some of us work in cushy office jobs, some people work in hazardous occupations that regularly expose them to dangerous or hazardous situations. For example, underground miners or skydiving instructors face more risks in their average work day than an office worker. As a result, many insurance providers deem certain occupations too risky to insure.
  • Hazardous hobbies and pastimes. Just as above with dangerous occupations, the recreational activities you choose to engage affect your insurance. Those who participate in adventure sports such as skydiving present a high risk for the insurer. As a result, many insurers will refuse to pay claims arising as a result of your involvement in a certain adventure sports or activities.
  • Death by suicide. If your death is the result of a suicide attempt, many policies will not pay a benefit to your family.
  • Wrongful information or failure to disclose. Some people make the mistake of failing to disclose information when applying for coverage. A lot of the time this as part of an effort to pay less for their premiums and is a crucial error. Not only is it your responsibility to disclose any relevant information to your insurer but your failure to disclose relevant information could mean your policy is voided, and your claim rejected.

Getting life insurance quotes

When you’ve determined exactly what type of insurance cover you need – and how much you need – it’s time to get quotes for how much that cover is going to cost you.

You will receive different quotes from different insurance companies and even from different advisers. As long as you’re sure they’re quoting on the same inclusions and coverage, it’s fine to compare the premiums payable and opt for the one that gives you the best level of cover for your money.

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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
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™. Take out cover today and you could get a bonus $100 Gift Card.
Get a quote for up to $15 million in life insurance cover. Cover can be tailored to meet your personal needs.
Flexible cover options to suit your budget. New eligible customers can receive 25,000 Velocity Points. Ends 31 Aug 2018. Min monthly premium and 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.
No expiry age as long as premiums are paid
Cover up to $1.5 million with Guardian 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.

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William Eve

Will is a personal finance writer for specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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