Top Tips on Getting Life Insurance for Women

Why are many Australian Women Still Underinsured?

Key Facts

  • Females only represent 15% Australia's population with income protection.
  • Joint cover policies can offer premium discounts of up to 5%.

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Women in Australia are underinsured - that’s a fact. Despite of making up 45% of the workforce, and earning 92% of male salaries, females only represent 15% of all insured incomes*. Women are also more vulnerable financially, with less time spent in the workforce due to other commitments, such as taking care of children and the elderly, and taking time off for maternal leave; resulting in a lower superannuation fund and less savings. Why is this the case with most women?

*Source: Financial Spectrum (8 Dec 2009)

Australians have historically held the mindset that men are the breadwinners of the family, and should be the sole life cover policyholder to protect the family. As a result, women may tend to undervalue the impact that their absence may have on their immediate family if they were to pass away, become terminally ill or unable to work. That notion carries less weight in todays society as many women now contribute a great portion to the combined household income.

What Life Insurance for Women Can Provide

Life insurance for women offers peace of mind and financial security for loved ones in the unfortunate event of your death. This means that in the event of your death, or if you become terminally ill or unable to work, they will not be left to deal with the financial burdens that you have provided for before. If you have children for example, life insurance can help with the costs of hiring a nanny to care for your children, or it can subsidise your partner's lost income who may need to take time off work to look after the children.

Different Types of Life Insurance Plans for Women

  • Term life - Term life insurance, also known as death cover, provides a lump-sum payment to your beneficiaries in the event of your death, or if you are diagnosed with a terminal illness with less than 12 months to live.
  • Income protection - Income protection insurance offers you a replacement income of up to 75% of what you earn in the event of you becoming unable to work due to illness or injury. You are able to choose the benefit period and the waiting period for your policy.
  • Critical illness - Critical illness insurance, also known as Trauma insurance pays you a lump-sum payment if you suffer a trauma condition such as cancer, heart attack, open heart surgery, strokes, brain tumours etc. Your policy will specify which health events are included in your coverage and which are not.
  • TPD - TPD stands for totally and permanently disabled and this life insurance policy will pay out a lump-sum payment if you become totally and permanently disabled and are unable to work anymore.

Life Insurance for Margaret

In the months following the Christmas break, Margaret started noticing some changes with her body. She had lost a lot of weight, and has had severe headaches that come and go. Margaret was in a meeting with executives one day when she suddenly felt very dizzy and hot. She excused herself from work that day and went to the doctor. She was diagnosed with brain cancer a few weeks later and declared unfit to work. As a result, she started receiving a supplementary income from her Income Protection, and she used this to continue her mortgage payments and for everyday living expenses. Margaret started spending more of her time with the family at home. Unfortunately the cancer spread quickly and Margaret was diagnosed with terminal illness with less than 12 months to live when she turned 46. Margaret and her husband were able to claim a lump-sum benefit due to her life cover, which allowed them to pay off the rest of the mortgage, hire a private tutor for Margaret’s youngest child, buy a new car for Margaret’s eldest child and add renovations to the house for the comfort of Margaret’s last days.Margaret has worked at a large supermarket chain all her life, gradually working herself up into management and eventually a corporate position by the time she turned 43. When Margaret was 33, she had decided to purchase life insurance as she and her husband were ready to start a family and buy a house. Margaret already had Life insurance with her superannuation, however, she decided that the $1500,000 coverage offered through her super was not enough, and purchases Life Cover with built in Trauma Cover and Income Protection Insurance to provide up to 75% of her income if she was forced out of work due to illness or injury. She wanted to make sure that her family would be protected if anything were to happen to her.

Without Life Insurance Margaret and her family would have faced considerable financial worries. They may have had to ask for immediate family members or close friends for financial support, and may not have certain luxuries and financial freedom. Was the Life Insurance benefits worth the premiums that Margaret paid over the years? Margaret says yes.

Life Insurance and Income Protection Benefits Women May Consider

Life insurance plans may include additional benefits or features that are catered specifically for women. It is essential to ask providers how you can tailor your policy to suit your needs. These are some of the common benefits that women may consider adding onto their insurance coverage (if they are not included already).

  • Family Protection: A lump sum benefit may be paid if the policyholder’s child is diagnosed with a serious illness as defined under the insurance cover.
  • Family Care Benefit: A benefit can may be paid to the insured person if they become totally disabled and will need to depend on an immediate family member to take care of them on a full time basis.
  • Pregnancy Premium Waiver: Premiums may be waived if the insured person becomes pregnant whilst under a life insurance policy.
  • Childcare Reimbursement Feature: The costs associated with childcare assistance could be reimbursed if the policyholder has suffered from a serious injury or illness.
  • Leave without pay continuation: Income protection insurance can continue to be under effect even if the insured person is on leave from work without pay.
  • Nursing Care Benefit: If the insured person becomes totally disabled, a benefit could be paid to assist with payment for the continuous care provided from a full-time nurse during the waiting period.
  • Counselling Benefit: Policyholder’s may be reimbursed for the use of counseling sessions following the payment of a Death Benefit or TPD Benefit.
  • Orphan Benefit: A dependent child will be eligible to receive additional payment if both the insured person and the spouse suffer an Accidental Death as a result of the same accident.
  • Family Cover Pause: The policyholder is able to reduce the monthly amount insured in the event of decreased income during pregnancy or if they/their spouse have just had children.

Save with a Joint Life Insurance Policy

If you take out a standalone life insurance policy and something happens to your partner, your family will not be covered. It is a good idea to consider Joint Life insurance coverage for a more complete and comprehensive coverage. Joint life insurance is especially designed for married couples who can, instead of taking out two separate individual policies, have the choice of taking out a single joint policy. Joint policies are usually cheaper than taking out two separate individual policies, and will be paid out if either of you pass away or is diagnosed with terminal illness. The surviving partner will receive the benefit payment, and be able to provide financial support to your family. With Joint life insurance cover you and your spouse can benefit from the peace of mind and financial protection offered should the worst happen in the future.

Tips to Compare Life Insurance Policies for Women

  • Consider your own circumstances: Every household has a different story. There are hundreds of Life insurance plans available out there, and it is up to you to find the right one for your situation.
  • Find the right coverage amount: Consider how much coverage you need in the event of your death, terminal illness or if you become unable to work due to illness or injury. You want to make sure you receive the right amount of coverage and you are not being underinsured or that you are not paying in excess of what you need to.
  • Find the right policy: The four major policies are Life cover, TPD, Trauma, and Income Protection. Perhaps you’d like all four for the maximum cover, or maybe you only require one of them for your situation.
  • Find the right company: There are large households names, and smaller less known companies dedicated to servicing a specific subset of the population (eg. women!) and it is up to you to find the company that you trust to be able to deliver you the financial assistance when you need it. Consider factors such as:
    • Reputation in the market
    • Customer support
    • Easy and efficient claims process?
    • Customer reviews
    • Additional or built-in options
  • Options and benefits: Each company offers different options that can be added onto your policy at an additional price. They may also have built in extras which they give you with the purchase of a Life insurance policy at no extra cost. Read the PDS published by the insurer to find out about all the benefits that are available.
  • Children’s cover: A common add-in benefit for life insurance for women is Child cover which offers a lump sum benefit if your child experiences a traumatic event. Each of the providers may offer a variation of this, so be sure to ask of this feature when choosing a life insurance policy.
  • Compare and save: It is of utmost importance to compare the different life insurance policies and find the best value for you money. Seeking advice from financial advisers and comparison websites may be a good idea, as you can often find a better deal than if you go directly to an insurance provider, as discounts are offered and some policies are not found with the providers themselves.

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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 December 3rd, 2016
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(days)
Life Insurance
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Receive up to $1,500,000 in life cover with American Express Term Life Insurance issues by Zurich. $1,000,000 69 30 Get quoteMore info
NobleOak Term Life Insurance
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Save 25% on NobleOak life insurance and pay no premium in the first month. $15,000,000 69 30 Get quoteMore info
Ezicover Life Insurance
Ezicover Life Insurance
Get up to $1.5 million in life cover. 10% discount available on a second life insurance policy when two policies are issued at the same time. $1,500,000 69 30 Get quoteMore info

* The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.

Maurice Thach

Maurice is a publisher for finder.com.au. Daily research of Australia's insurance offerings allows him to breakthrough the noise of the many policies out there to uncover what can (and can't) be covered. Maurice hopes to make finding the right insurance easier for all.

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