Best life insurance Australia

Beneficiary

The person you've nominated to receive your life insurance payment if you die or become terminally ill. You can nominate anyone as your beneficiary. There can be more than one beneficiary and each beneficiary can receive different amounts.

Children's insurance

Covers your child for death, terminal illness or a serious injury or illness that's specified in your policy. Typically, children's cover needs to be added as an optional extra.

Finder looked at 16 policies on our database and found just a few give you the option of adding a child to a policy.

Cooling-off period

The amount of time in which you can cancel your policy after signing up – and get a full refund of any premiums paid. The vast majority of insurers offer a cooling-off period of up to 30 days.

Counselling benefit

Some insurers will pay costs for grief counselling sessions for you or your partner. Counselling benefits usually have a limit of around $1,000. It can be claimed after a death or terminal illness claim.

Exclusion

An exclusion is any specific risk or event that you can't claim for under your policy. Insurers can apply exclusions to certain pre-existing medical conditions. For example, they may not cover any claims related to mental health.

Exclusion period

How long you'll have to hold your insurance before a policy exclusion turns into a claimable event. For example, it's common for suicide to have a 13-month exclusion period.

Funeral benefit

Pays a lump sum benefit – usually up to $15,000 – so your loved ones can meet the cost of your burial or cremation without using their own money.

You could look for a funeral policy offering a guarantee that any payout won't be less than the total you've paid in premiums. This is sometimes called a premium guarantee.

Guaranteed acceptance

You can get insurance without having to answer any health questions, or take a medical exam or blood tests.

Guaranteed acceptance policies, also known as auto-acceptance policies, will have an age eligibility requirement. This can range between 16 and 80 years of age.

Guaranteed renewability

The insurer lets you renew your coverage each year, as long as you keep paying for your premiums. Many life insurers in Australia offer this peace of mind.

Income protection insurance

Income protection insurance pays a monthly wage if you need to take time off work due to a sudden accident or illness. Many insurers will pay up to 70% of your pre-tax income.

Inflation protection

This ensures your premiums keep up with inflation so that your amount of cover is worth as much by tomorrow's dollar. You can ask your insurer to switch off this automatic policy feature, but it could leave you underinsured.

Interim accident cover

Insures you while your life insurance application is being underwritten or waiting to be approved. Typically, interim insurance will cover you for up to 90 days.

Joint life insurance

A policy that covers 2 people, but it pays out once. A lump sum goes to the other policyholder in most cases.

Joint life insurance can be a cheaper option than 2 single policies. But it's potentially complicated if a relationship ends.

Level premium

Your insurance generally won't increase in price as you get older. You'll usually pay more in the beginning but it offers more certainty over time. Only a few direct insurers in Australia offer level premiums.

Loading

Essentially, you have to pay a bit more to include your health condition, job or hobby in your policy. Any loadings will be offered during the life insurance application process.

Minimum cover

The smallest amount of insurance (or, sum insured) you can take out. Many insurers in Australia set a minimum cover level of $100,000.

Maximum cover

The cover limit offered by an insurer. It's the most you can be paid out after a claim. Maximum cover limits can range from $500K to $25 million. TAL told Finder it had "no set limit" for a payout.

Maximum entry age

The maximum age you can be to apply for life insurance. Common age caps are 64 or 65, but some providers go up to 70+.

Medical assessment

A medical undertaken for insurance purposes, either for a new insurance policy or a re-assessment of an existing policy.

Some insurers will require you to have a physical examination before you're approved, while others will just need you to answer questions about your medical history on your application form.

Monthly benefit

A regular monthly payment if you're unable to work due to illness or injury. It's designed to replace a portion of your regular income. Monthly benefits are a common feature of income protection policies.

Mortgage protection insurance

Insurance that can cover your mortgage repayments if you have a serious illness or die. Mortgage protection will only cover your mortgage repayments, not all the other bills you'd need to pay if you lost your ability to earn an income.

Personal accident insurance

Insurance to replace your income if you are temporarily unable to work after an accident. This cover can be bought as a standalone policy. Keep in mind it won't cover you if you get sick and can no longer work.

Personal insurance

An umbrella term for the following 4 core types of life cover: Life insurance, total and permanent disability (TPD) insurance, trauma insurance and income protection cover.

Choose the type of cover that best meets your personal situation and needs.

Pre-existing medical condition

A condition you have, or have had, prior to taking out life insurance.

You may be able to get life insurance that includes cover for a defined medical condition. It's likely to cost you more. However, if an insurer thinks your condition is too high risk or isn't under control, it'll exclude it from your policy.

Premiums

The amount you pay an insurer for your cover. Premiums can be paid weekly, fortnightly, monthly or annually.

Premium suspension cover

A policy option that lets you stop paying premiums entirely. You will typically lose all your cover while your policy is suspended.

Not all life insurance policies include a suspension of cover benefit. Check with an insurer directly.

Premium freeze

A premium freeze lets you stop your premiums from increasing as you age.

It's only available with stepped premium policies because the cost rises with age. By activating a premium freeze, your level of cover will drop over time.

Retail life insurance

Buying life insurance through a broker, who will give you tailored advice on securing cover.

Buying a retail policy is 1 of 3 ways to get life insurance in Australia. The others are directly with an insurer or through your superannuation.

Salary continuance

You can receive up to 75% of your regular earnings each month to cover general living expenses if you can't work due to an accident, illness or injury.

Salary continuance insurance is held within a super fund, and you'll pay your insurance premiums from your super balance rather than directly from your bank account.

Smoker status

If you've regularly used a nicotine product in the past year, including vaping, then you will be considered a smoker in your life insurance application.

Typically, to be classed as a "non-smoker" you'll need to be free of any smoking products for 12 months, but this can vary between insurers.

Stepped premiums

How much you pay for your policy increases each year by a certain percentage. Most policies in Australia have stepped premiums. Yearly increases can range from 2% to 7%.

Term cover

A type of life insurance that provides a set amount of cover for a set amount of time (or "term"). The maximum cover offered by term policies can range from $100,000 to $1 million.

Terminal illness benefit

An insurance which pays out a lump sum if you're diagnosed with an illness which cannot be cured, such as advanced cancer. Benefits can range from around $1 million to as much as $25 million in Australia. It's usually included with a life cover policy.

Total and permanent disability (TPD)

An insurance that pays a lump sum (as high as $5 million) if you get sick or injured and become permanently disabled. In most cases, TPD cover is available as an add-on when you take out life insurance.

Trauma insurance

A type of insurance that pays out if you are diagnosed with a critical illness or suffer a life-changing injury that's listed in your policy. Examples can include cancer, heart attack and stroke. Trauma insurance pays up to $2 million as a lump sum.

Underwriter

When you apply for cover, the insurance underwriter assesses your level of risk and determines whether the insurer should offer you cover, as well as under what conditions that cover should be offered.

You could check to see if a policy has been underwritten by a major insurer, backed by many years of experience.

Underwritten

With an underwritten life insurance policy, your application is assessed upfront. A policy that isn't underwritten is assessed at the time of a claim.