Find and compare short term life insurance cover in Australia.
A type of insurance protection that provides cover for death and terminal illness in Australia is commonly known as term life insurance. The ‘term’ in life insurance means that the cover is provided for a specified period of time or until the policyholder reaches a certain age.
Most term life insurance policies on the Australian market are offered with guaranteed renewal and the cover will continue until your 99th birthday, provided that the premiums are paid when due. However, life insurance plans with limited terms are now also available through select insurers and you have the option to choose 5, 10 or 15 year term policies.
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What is the Definition of Short Term Life Insurance?
Short term life insurance policies are insurance contracts that provide death and terminal illness cover for a limited amount of time. Cover will cease once the policy reaches its expiration date or if there is a lapse in the premium payments. In the event that you pass away or are diagnosed as terminally ill with only 12 months to live while your policy is active, your nominated beneficiaries will receive a lump sum benefit payment.
How does Short Term Life Insurance Work?
Short term life insurance works just like any other standard life cover, although it will only provide cover for the duration that you have nominated. Most insurers will offer cover periods of either 5, 10 or 15 years. It is designed to provide simple and affordable cover, as the structure of benefits and policy features are not as comprehensive compared to term life policies with guaranteed renewal.
Can I Get Short Term Life Insurance for Travel?
You can get short term life insurance to provide cover while you are travelling, although it is important to note that not all Australian insurance providers offer policies with limited terms.
Renewable term life insurance policies in Australia generally provide cover no matter where you are in the world, 24 hours a day 7 days a week. So, if you have this type of cover already in place, you will be covered under your policy when you are travelling abroad or domestic.
Benefits of Travel Insurance When You are Travelling
Apart from life insurance, you may also want to consider travel insurance as an additional layer of protection for when you are travelling. Other than events of personal loss, travel insurance can also provide cover in the event of death, illness or injury. A limited benefit amount of around $25,000 is payable if your death is caused by an accident. If you suffer from a disability from an accident that occurred during your trip, a benefit amount between $10,000 and $25,000 will be payable.
In addition to death and disability cover, travel insurance also covers you for personal loss that may occur when you are travelling. Travel insurance provides financial compensation for events such as:
- 24/7 overseas medical assistance: You will have unlimited cover for any medical expenses incurred while you are overseas, such as emergency medical services, ambulance fees, medical evacuations and funeral arrangement.
- Cancellation fees and lost deposits: If you have pre-paid your travel arrangements and there are changes to your plans due to unforeseen circumstances, such as illness, injury, strikes, retrenchment and natural disasters, you will be covered for any cancellation fees and lost deposits.
- Luggage and personal effects: In the event that your luggage and/or personal effects are stolen, lost, or damaged during the duration of your trip, your policy will cover the replacement costs.
- Delays and disruption of journey: If you trip has been delayed for a specified period of time for reasons beyond your control, your travel insurance policy will cover the expenses incurred from additional food and accommodation expenses.
What are the Differences between Long Term and Short Term Life Insurance?
As previously mentioned, while the purpose of both short term and long term life insurance cover is similar in nature, there are some notable differences that you may need to be aware of:
|Generally more affordable than long term life insurance due to a more simplified structure of cover.||While it is more costly than short term life insurance, long term cover provides the flexibility for policyholders to tailor their policy with additional features and benefits.|
|Comes with the standard built-in benefits, such as:||Offers the standard built-in benefits, including other features and riders that are not available with short term policies, such as:|
|Short term life insurance policies have an expiration period of 5, 10 or 15 years, depending on the length of term that you have chosen.If you find that you still require cover when your policy has expired, you will have to purchase a new policy.||Since most long term policies come with guaranteed future insurability feature, you will continue to be covered until you turn 99 years old. This is provided that premium payments are met.In the event that you are unable to cover your premium payments consecutively, your cover will lapse.|
How Much does Short Term Life Insurance Cost?
As previously mentioned, short term life insurance policies are generally more affordable than plans with guaranteed renewal feature. However, it is important to note that the premiums you pay will vary significantly depending on the following factors:
- Age: Younger policyholders will generally pay lower premiums since they are considered to carry less health related risks, making them less likely to claim than older policyholders.
- Gender: Males generally pays more in premiums compared to females as they are more prone to specific health conditions as they age.
- Occupation: The types of risks that you are exposed to while you are at work will also affect the premiums you pay. If you work in a high-risk occupation, such as mining and manual labour, you can expect to pay more in premiums compared to low-risk occupations, i.e. office workers.
- Health: If you have a pre-existing medical condition, your premiums will be higher than those who are in good health.
- Lifestyle: If you are a smoker, you will pay almost double in premiums compared to those who do not smoke. Higher premiums will also affect applicants that have higher than average alcohol consumption and are overweight.
- Hobbies and pastimes: The activities that you do outside of work matter to an insurance provider, especially if they are considered to be risky, such as skydiving, parasailing and underwater diving. Your premiums will be more expensive as you are considered to pose higher risk of claiming to the insurer.
Why You May Want to Consider Life Insurance Cover with Limited Term
Due to its affordability, short term life insurance may be more suitable for applicants who are looking for cover in their later stages of life. The simple and straightforward benefit structure of short term policies can be valuable to applicants who are looking for basic financial cover for their loved ones, without sacrificing the quality of cover.
However, it is important to note that short term life insurance will only cover you for a limited period of time and you will have to take out a new policy if you still require cover at the end of your policy. The premiums of your new policy may be more expensive depending on your age and your health condition at the time of application. Therefore, it is essential to carefully assess your family’s needs in the present and future, and determine whether or not short term life insurance policy is the most suitable protection solution to your situation.
How Do I Buy Short Term Life insurance?
To purchase a short term life insurance policy, start with getting an online quote and filling in your details on the form. A life insurance adviser will be in touch with you to discuss your options and provide recommendations on suitable short term life insurance plans. They will also take into consideration your needs and provide advice on term life policies that may be more suitable to your situation.
Looking to Buy Short Term Life Insurance Direct?
You have the option to purchase cover through direct life insurance providers for simple and straightforward application. Your application can be completed online or over the phone, and your cover will be active as soon as your application has been approved.