Top 10 Life Insurance Tips

Confused about your cover options? He's 10 life insurance tips to help you make the right choice.

Life insurance is an important part of financial planning. However, with all the complexities of different policies, understanding all of the ins-and-outs can be difficult.

Here are 10 tips to help you make the right choice when looking for cover.

1. Purchase life insurance when you're young and healthy.

youngYou might be asking why insure yourself when you are young and healthy? Statistically, most insurance claims are paid to people between the age of 30 and 40.


level2. Go for level premiums if you're thinking about long term.

Choosing a premium structure, stepped or level, will depend on your financial situation. Stepped premiums are premiums that increase as you grow older. The advantage for this type of premium structure is that the initial premiums are much lower than level premiums. However, the premiums continue to increase each year until the end of the term.

Level premium remain the same until you reach the end of your term. This means that while your premiums start higher, by the end of the term, you're paying less than if you'd chosen stepped premiums.


3. Think about your income.

incomeHaving income protection can provide you with up to 75% of your monthly gross income if you are unable to work because of an illness or injury. The monthly stream of income you will receive will help ease your burden financially by providing for the daily needs of your family.


comprehensive4. Opt for a comprehensive cover.

You can protect yourself against a range of risks by taking out a comprehensive life insurance policy. A comprehensive policy can protect you in the event of

  • Disability
  • Critical illness
  • Death


5. Change your lifestyle.

lifestyle-runninggOne of the factors that could affect the cost of your premiums is your health and lifestyle. If you're a smoker, your monthly premiums will be more expensive because you're more prone to risks than non-smokers.

If your Body Mass Index (BMI) is low, so are your premiums. It's important to consider living a healthier lifestyle to minimise your insurance premiums.


review-policy6. Review your policy on a regular basis.

As you go through life your needs change. The policy that you took out when you were 30 years old and starting your family may not be right for the 55 year old you who is eyeing the not to distant possibility of retirement. By reviewing your cover you can make sure that the level of cover you have suits your current situation. If it's too much, see how much you could save by taking out a new policy with a lower level of cover.


7. Make annual payments.

annualPaying your premiums annually can save you up to 8%.


application8. Don’t be discouraged by the application process.

As a part of the underwriting process you will be asked to disclose some personal information such as your lifestyle, salary, and medical history. While you may not feel comfortable telling a stranger your personal business, it is necessary for them to know this information in order to create an accurate picture of the risk you pose. This risk will determine your premiums. And don't try to sneak anything by the insurer, if it comes out that you failed to disclose any pertinent details you run the risk of your policy being voided.


9. Assess future possibilities with your spouse.

Getting life insurance is a major decision that will have an impact on you and your spouse/partner. Take the time to sit down with your spouse/partner and talk about how each of you would financially cope if the other passed away. By assessing your finances together, you will have an idea how much life insurance you need. You have the option to apply for jointly owned life insurance policy, which will protect both of you in the event of death or terminal illness and you can also take advantage of possible discounts from insurance providers for this type of policy.

10. Choose trustworthy companies.

There are hundreds of insurance providers in the market. It's important to choose one with a proven track records, from reputation in the market (awards and reviews) to customer service to claims history.

Additional guides to help you choose

Before you buy: Comparing, applying and avoiding rip-offs

Currently own a policy? Cancelling, switching and planning for the future.

Pre-existing conditions and health: Health factors, disclosure and premiums.

Tax and super tips: Get more out of your policy with handy tax tips.

Claims and payouts: Learn how to make a successful and fast claim.

Understand how life insurance works as you get older

Life Insurance Quotes for over 60s

Life Insurance Quotes for over 60s

If you already reached 60 years old then surely it’s already your retirement stage. Having life insurance quotes is going to be so beneficial not only for you but also for your family to provide your daily expenses without worries. Read more…

Compare Life Insurance quotes with an adviser

Please enter your full name
Please enter a valid email address
It's important to give us a valid phone number
Gender
Smoker
Date of Birth
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.
By submitting this form, you agree to the finder.com.au privacy policy
Get quotes

Compare Life insurance quotes from these direct brands

Rates last updated September 25th, 2017
Product details Maximum cover Maximum Entry Age Cooling-off
(days)
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 finder.com.au who loves finding an answer to the question "Am I covered for ________?"

Was this content helpful to you? No  Yes

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, read the PDS or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and Privacy Policy.
Ask a question
feedback