Call BT at 1300 553 764 to get a personalised quote for your circumstances
69
Yes
Call BT at 1300 553 764 to get a personalised quote for your circumstances
TPD Benefit, Living Benefit, Business Cover Benefit
Westpac
Call Westpac at 132 135 to get a personalised quote for your circumstances
69
Yes
Call Westpac at 132 135 to get a personalised quote for your circumstances
TPD Benefit, Living Benefit, Business Cover Benefit
St.George
Call St. George at 132 135 to get a personalised quote for your circumstances
69
Yes
Call St. George at 132 135 to get a personalised quote for your circumstances
TPD Benefit, Living Benefit, Business Cover Benefit
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.
What is term life insurance?
Term life insurance is a type of life insurance that provides a set amount of cover for a set amount of time (or, 'term'). It can protect your family or anyone else who's financially dependent on you if you pass away or are diagnosed with a terminal illness, before what's known as the policy's expiry age. Term life insurance can help your family pay debts and ongoing payments, such as a mortgage, if you're no longer around.
There is no cash payout or 'surrender cash value' in term life insurance. You pay a premium to have cover in place. If the term ends or you cancel your policy, you won't receive payment.
Pros and cons of term life insurance
Pros
It offers a lump sum payout. Your benefit's paid in one go, meaning your family has flexibilty with how they can use the money. It could be used to pay off debts such as the mortgage or credit cards. Or to maintain your family's lifestyle, such as your children's education costs.
You can be paid out if you get a terminal illness. If a medical practitioner expects you to die within 12 months, your policy can pay out the benefit as an advance payment. A terminal illness payment can help with medical bills, funeral costs or even as a cash gift.
Your policy can be renewed each year. Most policies can be renewed until you reach the age of 99, if necessary.
Policies can be straightforward. Exclusions are fairly limited with term life insurance. One common exclusion is a passing from suicide in the first 13 months of a policy. Otherwise, your family will usually be able to rely on a cash payout if you die during the policy term.
Cons
There's no benefit once the term ends. If you outlive your term insurance policy, it'll expire. Your beneficiaries won't receive any cash out or death benefit. (It's a key reason why term life insurance is competitively priced.)
Regular renewals and rising costs. Term life insurance is not a 'set and forget' insurance product. As a policy is only valid for the term you've chosen, when the policy expires at the end of that term you need to take out a new policy if you want to continue to be covered. At the end of the term, you're older than you were when you first applied, it could well make finding a new policy more expensive.
Your premium will directly reflect your lifestyle. Your premiums will be based on the level of risk you present to your insurer. If you smoke, engage in high-risk activities or work in a dangerous occupation, you can expect to pay more than others.
How much does term life insurance cost?
Below is a quick view of how much life insurance could cost you, per month.
*Prices are an estimate based on a 35 year old non-smoking male office worker. Quotes last checked on September 2021 and are subject to change.
When is a good time to take out cover?
This will really depend on your own situation and what you would need to cover in the event of your death.
Some key triggers that lead people to take out cover or review their existing cover include buying a house, getting married and having their first child.
Building Wealth
18-25
25-35
35-45
Starting career
Start accumulating wealth
No dependents
No mortgage
Few financial commitments
Active lifestyle
Increase in earnings
Career development
Long term debt with mortgage
Possible short-term debt
Marriage and children
Increase in earnings
Career development
Mortgage decreasing
Saving for retirement
Securing retirement
45-55
55-65
Maximising earnings
Preparing for retirement
Less concern around financial security
Less long-term debt
Fewer financial commitment as children start to move out
Focus on other investments
Protecting wealth accumulated
Income decreases
Focus on investments
Finance lifestyle with savings
The maximum entry age may also change based on the type of premium you choose and how much cover you apply for.
Are there any add-ons I should consider for term life insurance?
There are a number of extra features you can add to your term life insurance policy to tailor it to your needs, and so you may want to consider:
Accidental death benefit. Will pay an additional amount above your coverage amount if your death is the result of an accident.
Children's term life insurance. Can pay a death benefit for each of your children covered under your policy in the event of their death. You can usually add insurance for your child for around $10,000 and $20,000, based on their age and other eligibility requirements.
Total permanent disablement. Will make sure your premiums are paid for you if you become totally disabled. There are often age and coverage restrictions that apply.
Accelerated death benefit. Will make an advance payment of part of your benefit amount if you are diagnosed with a terminal illness.
Term life insurance pays a lump sum if you pass away or are diagnosed with a terminal illness. Total Permanent Disability TPD insurance provides a lump sum payment if you become permanently disabled and are unable to work again. While term life covers death and terminal illness TPD covers severe permanent disability.
Term life insurance provides a lump sum payment to your beneficiaries if you die or are diagnosed with a terminal illness. Income protection insurance on the other hand provides a regular income stream if you are temporarily or permanently unable to work due to illness or injury. Income protection replaces a portion of your income while you are alive and unable to work.
Term life insurance pays out for death or terminal illness. Trauma insurance also known as critical illness cover pays a lump sum if you are diagnosed with a specific serious medical condition such as a heart attack cancer or stroke. Trauma insurance provides funds for recovery while you are still alive whereas term life is for death or terminal illness.
Term life insurance offers a substantial lump sum payment to your beneficiaries that can cover a range of financial needs including debts living expenses and education costs. Funeral insurance provides a smaller benefit specifically designed to cover funeral and related end of life expenses.
The claims process typically involves your beneficiaries contacting the insurer to notify them of your passing or terminal illness diagnosis. They will need to complete a claim form provide identification documents and supply supporting medical and death certificates. The insurer will then assess the claim and if approved pay the benefit.
Your beneficiaries will generally need to provide a certified copy of the death certificate the original policy document proof of the beneficiaries identity and bank details and any medical reports or diagnostic tests related to the cause of death or terminal illness. The insurer may request additional documents as needed.
This can vary depending on the complexity of the case the completeness of the documentation and the insurer's processes. Simple claims with all required documents can sometimes be processed within a few weeks while more complex cases may take several months.
If you miss a premium payment your policy may enter a grace period usually 30 days, during which you can still make the payment without losing cover. If the payment is not made by the end of the grace period, your policy may lapse meaning your cover will cease. It is important to contact your insurer immediately if you anticipate missing a payment.
Yes, most term life insurance policies have specific exclusions. Common exclusions include death as a result of suicide within the first 13 months of the policy, or certain high risk activities that were not disclosed at application, or death due to a pre-existing condition that was not declared or accepted by the insurer. Review your Product Disclosure Statement PDS for full details.
You can generally cancel your term life insurance policy at any time by contacting your insurer directly. They will usually require written notification. Keep in mind that if you cancel outside of the initial cooling off period you will not receive a refund of premiums paid for the period you were covered.
Yes, it is possible to hold multiple term life insurance policies from different insurers. Some people choose to do this to achieve a higher total sum insured or to tailor different policies to specific needs. However you will need to apply for and pay premiums for each policy separately.
You can nominate almost anyone as a beneficiary on your term life insurance policy including your spouse children other family members a de facto partner or even a legal entity. It is important to ensure your nominated beneficiaries are clearly identified and kept up to date to avoid delays or disputes.
James Martin was the insurance editor at Finder. He has written on a range of insurance and finance topics for over 7 years. James often shares his insurance expertise as a media spokesperson and has appeared on Prime 7 News, Insurance News, 7NEWS and The Guardian. An experienced journalist, James' work has featured in publications including The Irish Times, Companies100 and In Business. He holds a Tier 1 General Insurance (General Advice) certification and a Tier 1 Generic Knowledge certification, both of which meet the requirements of ASIC Regulatory Guide 146 (RG146).
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Richard Laycock is Finder’s insights editor after spending the last five years writing and editing articles about insurance. His musings can be found across the web including on MoneyMag, Yahoo Finance and Travel Weekly. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance.
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The term “life insurance” can refer to a wide range of different policies. Find out what is right for you.
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