Personal Insurance

What types of personal insurance are available in Australia?

Personal Insurance is a type cover that provides financial security to your life and your family's in the event of a serious injury or illness, loss of ability to earn, total and permanent disablement or death. This cover will enable you and your family to maintain your way of living by providing payment to cover any outstanding debts and everyday expenses. The four main types of personal insurance include:

  • Life insurance. This is designed to pay out your dependents a lump sum if you pass away.
  • Total and permanent disability insurance. This type of cover provides you with a lump sum if you are injured or fall ill and are unable to work permanently.
  • Critical illness insurance. This provides you with a lump sum if you suffer a serious injury or illness as defined the policy.
  • Income protection insurance. This replaces a portion of your income.

Compare policies 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
Compare Quotes

Compare direct life insurance options

Rates last updated May 29th, 2017
Product details Maximum cover Maximum Entry Age Cooling-off
(days)
Ozicare Life Care
Ozicare Life Care
Get up to $1 million in life insurance with Ozicare Life Cover. $1,000,000 64 30 Get quoteMore info
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
Insuranceline Life Insurance
Insuranceline Life Insurance
Get up to $1.5 million in life cover with no medical tests required. $1,500,000 69 30 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
TAL Lifetime Protection Life Insurance
TAL Lifetime Protection Life Insurance
Get up to 1.5 million in life insurance cover and choose from a range of additional options. $1,500,000 74 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
Life Insurance
Life Insurance
Get flexible life insurance up to the sum of $2,000,000. $2,000,000 59 21 Get quoteMore info
NobleOak Term Life Insurance
NobleOak Term Life Insurance
Receive first month free for life insurance or two months free for combined cover. $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

The four types of personal insurance coverage

Four types of insurance can sum up all other insurance plans available in the market. They may have similar features and benefits, but they have all been designed for one purpose – to give you peace of mind and protection.

They can be purchased separately or as a package depending on your needs and the risks you are exposed to.

1. Life Insurance

Life insurance is one of the oldest types of insurance in existence. It was also the first to be made readily available to the general public. There are two types of life insurance; whole life policy, in which Australian life insurers offered in the past and term life cover.

With term life insurance, you have the flexibility to choose the period of time you would like to be covered for, from 5, 10, 20 or 30 years. When deciding the right term for your situation, it is important to assess your short and long-term financial commitments, future expenses, and the duration of time that you want to continue providing for your family.

Life insurance was primarily designed to provide coverage in the event of your death or if you have a terminal illness, with only 12 months to live. It pays a lump sum benefit, which can be used in any way your financial dependents deem to be necessary. Life insurance proceeds can be used by the family to:

  • Pay for funeral expenses
  • Pay off mortgage and other financial obligations that have left behind
  • Take care of your estate planning needs
  • Pay for other extra expenses your family might need
  • Provide a reserve for your spouse should they decide not to work anymore.

Learn more about how life insurance actually works


2. Income Protection Insurance

Income protection insurance is the most overlooked type of insurance policy. A lot of people would purchase car insurance or home insurance without batting an eyelash; while not giving income insurance a thought. Contrary to what is circulating, income insurance can be a great help to you in one of the most stressful times of your life – temporary unemployment due to an illness or injury, which could often last for an extended period of time.

Income protection provides you a steady stream of monthly income by paying you 75% of your gross monthly wage. This is given when you become disabled due to an illness or injury. You can continue receiving this benefit every month until you are able to go to work again. Furthermore, income replacement premiums are generally tax-deductible, but the benefit payments will be taxed, as they are treated just like a regular income.

Income protection can be used for the following benefits:

  • Helps you with daily expenses, such as bills and food
  • Pays the rent or costs of maintenance
  • Helps pay mortgage and other debt repayments.

Learn more of the benefits of income protection


3. Critical Illness or trauma

Critical Illness insurance pays you a lump sum upon diagnosis of a traumatic medical event, such as heart disease, cancer, or stroke. As it is a type of a living insurance, it does not wait for you to die before you can benefit from it. Also known as Trauma Insurance, Critical Illness insurance can be a great help when you are going through tough medical situations by providing an alternative source of funding to your financial commitments, so that you can focus on getting better.

Critical illness policy covers may cover up yo 40 different types of medical conditions; however, it is important to note that the definition and medical events that are covered may vary from provider to provider (for example, heart attack). Therefore, it is essential to ask your insurance provider of what is and is not included in your policy before signing along the dotted lines

Critical illness insurance can:

  • Cover your medical expenses
  • Purchase medical equipments to aid your recovery
  • Pay rehabilitation costs
  • Cover the hire fees of a nurse/housekeeper
  • Home modifications
  • Provide funds for a holiday for you and your family to recuperate
  • Gives extra income to your family to keep up with ongoing financial commitments.

4. Total and Permanent Disability (TPD) Insurance

TPD cover provides a lump sum payment to help you cover for the costs and expenses incurred when you have been rendered permanently disabled, due to a serious illness or injury, and it is unlikely for you to return to a full working capacity in the future. This lump sum benefit can be used by you and your family to:

  • Pay for medical expenses
  • Pay for your rehabilitation costs
  • Cover fees on hiring a nurse/housekeeper
  • Modify your home and vehicle to cater to your new condition
  • Keep up with daily living expenses and other immediate financial commitments.

In short, Total and Permanent Disability insurance allows you the financial freedom that could otherwise be difficult to achieve when you become disabled. TPD insurance can ease the stress of the situation and you can have the peace of mind knowing that there is a financial backup to fall upon despite of your new condition.

Learn more about how TPD Insurance actually works

Compare quotes for personal insurance from Australian brands

Was this content helpful to you? No  Yes

Related Posts

Ask a Question

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

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Ask a question
feedback