Quiz: Do I need life insurance?
When to think about taking out life insurance
People think about life insurance around these life stage changes:
New job
Married
Had a baby
Bought a house
Made a large
investment
Come into a large
amount of money
The most common are:
- Having children. Parents-to-be often consider life cover to be a high priority when having kids enters their life.
- Buying a house. Getting a mortgage is the biggest financial commitment most people make in their lives. It stands to reason that you'd consider protecting yourself ahead of your first mortgage payment.
- Employment circumstances change. Going self-employed is one example of a time you'd want to consider life cover, especially if you lose other types of insurance that were tied to your former employers.
Finder survey: At what age do Australians get life insurance cover?
| Response | 75+ yrs | 65-74 yrs | 55-64 yrs | 45-54 yrs | 35-44 yrs | 25-34 yrs | 18-24 yrs |
|---|---|---|---|---|---|---|---|
| Life insurance | 13.79% | 16.57% | 32.56% | 37.31% | 38.07% | 43.12% | 27.84% |
Based on where I'm at in life, what type of cover do I need?
Everybody is different and cover requirements will change based on the events you encounter at different life stages. But still, it's worth a look at a more detailed overview of key times many decide to take out cover based on their life stage.
Different types of life insurance
Here are the main types of life and income protection cover you can get:
Life cover.
Term life insurance provides a lump sum benefit to your beneficiaries in the event of death or after the diagnosis of a terminal illness. You can get this insurance as a standalone policy, or bundled with more cover options.
TPD insurance.
Total permanent disability (TPD) insurance provides a lump sum benefit if the policyholder suffers a disability as defined in their policy.
Trauma insurance.
Provides a lump sum benefit if the insured suffers a medical trauma that is specified in their policy. Most policies will cover up to 50 different conditions including strokes, cancer and heart attacks.
Funeral insurance.
Funeral insurance provides a lump sum benefit to cover funeral costs and other outstanding expenses. The maximum amount of cover that can be taken out is usually about $15,000.
Income protection insurance.
Income protection offers an ongoing benefit of up to 70% of the policyholder's regular income if they are forced to take time off work due to illness or injury. This benefit is usually paid monthly.
How much life insurance might I need?
The amount of life insurance you need depends on your personal circumstances, such as your age, and the type of cover you want. Start by coming up with an annual sum you'd need to cover your financial commitments. Some experts say the amount of cover you'd want is at least 10 times your annual salary. But it's really up to you to decide how much your family would be comfortable with based on your situation.
You could also check to see if you already hold some life cover, such as via employment benefits. See how much that would pay out to your dependents and then calculate how much extra they might need.
Compare life insurance quotes from more direct brands
Finder Score - Life Insurance
Life Insurance is a little complicated and a lot overwhelming. That's why we made the Finder Score, to make it easier to compare Life Insurance products against each other. Our experts analysed over 20 products and gave each one a score between 1 and 10.
But a higher score doesn't always mean a product is better for you. Your situation is unique, so your policy choice will be too. Don't think of Finder Score as the final word, but as a good place to start your life insurance comparison.
Read full Finder Score methodology
Why compare life insurance with Finder?
-
You pay the same price as buying directly from the life insurer.
-
We're not owned by an insurer (unlike other comparison sites).
-
We've done 100+ hours of policy research to help you understand what you're comparing.
