Life Insurance Types at Different Life Stages

Review Your Life Insurance Cover at Different Stages

As one of the most underinsured nations in the developed world, the vast majority of Australians either have none or an insufficient amount of insurance cover in place. While most of us have a default level of cover provided through our super, studies have shown that this is usually only a fifth of what you really require. What’s more, many families don’t have any “living insurance” in place , which is designed to protect the main income earner should they be temporarily and permanently out of the workforce due to serious injury or illness. It’s critical to review the cover you have as the years go by and your lives change to ensure we still have the right cover in place.

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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).
Get life cover up to $1.5 million. Plus, ahm health members can save 10% off premiums.
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.

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.
No expiry age as long as premiums are paid
Cover up to $1.5 million with Guardian Life Insurance.

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What Types of Life Insurance Do I Need At Different Life Stages?

TypePurposeWhen to Take it OutWhat Can it Cover?
Life InsuranceProvides a lump sum benefit in the event of death or terminal illness with 12 months to liveIt’s worth considering life insurance as soon as you have any significant financial obligations that would need to be covered in the event of your death. Some key stages that people consider life cover include:

  • When they buy a house
  • When they get married
  • When they have kids
  • Outstanding mortgage payments and other debt
  • Everyday living expenses
  • Education costs
  • Cost of a funeral
Income ProtectionProvides an ongoing benefit of 75% of your income if you are forced to take time off work due to serious illness or injury. This is usually paid monthly. Additional benefits can be provided to cover rehabilitation costsIncome protection is worth considering if you are working full-time and are no longer dependent on your parents or anyone else for financial support
  • Mortgage or rent repayments
  • Daily living expenses
  • Rehabilitation expenses
Trauma InsuranceProvides a lump sum benefit if you suffer a trauma event that is specified on your policy. Conditions include:

  • Stroke
  • Cancer
  • Heart Attack
Similar to Life Cover, Trauma Insurance is worth considering when you have significant financial obligations. It is often bundled under the same policy as life cover. Trauma Insurance is often quite popular among older people as they become more susceptible to suffering a condition
  • Outstanding debts
  • Daily living expenses
  • Rehabilitation expenses
  • Additional medical costs
TPD InsuranceProvides a lump sum benefit if you become disabled as defined under the policySimilar to both Life and Income Cover, TPD is worth considering as soon as you start full-time employment and have financial obligations to cover
  • Outstanding debts
  • Daily living expenses
  • Rehabilitation expenses
  • Additional medical costs
  • Modifications to your home if necessary

I've Already Got Cover in Place...Why Do I Need to Review It?

Even if you already have cover in place, it is recommended you review your cover at least once a year. Here are some reasons why:

It Might Not be Enough

The cover you have may not be sufficient to cover new financial obligations. Events that may trigger this include:

  • An increase in mortgage debt after the purchase of a new home
  • The birth of a child
  • New financial dependence from another family member
  • Changes to income

It Might be Too Much!

You may find that you actually have too much cover in place and are paying hundreds in premiums for insurance you don’t need. Events that may reduce your cover requirements include:

  • Paying off your mortgage
  • Kids move out of home
  • Separation or divorce

You may also need to review the beneficiaries that you have listed on your policy following some of the events above.

There Might be a Better Deal out There

You may find the cover you took out 10 years ago doesn’t provide protection suitable to your needs and there is a more appropriate option at a better price. Speaking with an adviser to see what else is available could save you thousands. The service is usually provided and there is absolutely no obligation to sign up for cover.

Hot Tips for Reviewing Your Life Insurance
  • When taking out a new policy, you may be required to undergo another round of medical underwriting that could lead to an increase in your premiums
  • You might want to consider funding your cover through your superannuation. Make sure you have a clear understanding of both the benefits and disadvantages of super funded cover before cancelling your cover
  • Keep an eye out for special discounts and exclusive offers from providers
  • No idea what you need? It might be worth speaking with an insurance consultant to help you find a suitable option at a competitive rate
  • Consider bundling different types of cover to save on your premium
  • Looking to get your partner covered? Joint policies can offer discounts of up to 10% on your premium
  • Compare, compare, compare - taking the time to research different policy options and receive a number of quotes from different providers could save you thousands
  • Don’t base your decision on price alone - cheaper policies may not offer the level of cover you need. Read the product disclosure statement before applying to know exactly what you are covered for

Whether you’re a working mom or a full-time homemaker, one thing’s for certain, you’re an important part of your family’s emotional and financial life. Getting your own life insurance is an important step in keeping your family’s future on track.

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