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Life insurance is there for you in life emergencies. Because there's more than one way in which your life can change unexpectedly, insurers offer specific policies for various different scenarios and needs. We've broken a few of the main ones down for you below.
Type | Payment type: | Main purpose | Entry age (Next birthday |
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Life cover (Death cover) | Lump sum | Pays out to loved ones in the event of your death | 18 - 79 |
Income Protection | Ongoing monthly benefit of up to 85% of regular income | Keep up with your expenses if you are forced to take some time out of work due to accident, illness or major trauma | 18 - 64 |
Trauma cover | Lump sum | Pays out if you're diagnosed with specific illness e.g. stroke so that you can focus on your recovery | 18 - 64 |
TPD cover | Lump sum | Payment to clear debts, cover medical costs if you become permanently disabled | 18 - 64 |
Funeral Insurance | Lump sum | Cover the cost of your funeral (up to $30,000) | 18 - 79 |
Accidental injury / death | Lump sum or income protection | Provides cover in the event of accidental injury /death (no sickness cover) | 18 - 64 |
An adviser can help you find cover from trusted life insurance brands.
The following calculation is an estimate based on your answers. There are limitations. You should always speak to an adviser to get a clearer understanding of your needs and the right mix of insurance for you.
Term life insurance provides a lump sum payment when you die or are diagnosed with a terminal illness during the term of the policy. You can choose the sum insured (up to a limit imposed by the insurer) for your policy, remembering that the premiums will rise along with your level of cover,.
You have the freedom to nominate the beneficiaries who will receive the life insurance payout and use this type of cover to provide financial support for your loved ones when you’re no longer around.
Term life insurance is sometimes also referred to as life cover or death cover.
There are several situations when purchasing a term life insurance policy can be extremely beneficial, such as:
A term life insurance benefit payment can be used to:
Most term life insurance policies will not provide any cover if your claim is a result of:
TPD insurance provides a lump sum payment if you suffer a serious illness or injury that leads to total and permanent disablement. In order for a claim to be paid, you will need to be unable to be likely to ever return to work again.
TPD insurance can be used to provide crucial financial security if you suffer an illness or injury and are unable to work again. If you have dependants, outstanding debts or other financial obligations, or if your financial standing relies on your ability to earn an income, TPD insurance is well worth considering.
A TPD benefit payment can be used to:
Your TPD insurance claim will typically not be paid if:
Trauma insurance is designed to provide cover when you suffer from a serious illness or health condition. When you experienced a specified trauma event, for example heart attack, cancer or stroke, trauma insurance provides a lump sum benefit. This type of cover is sometimes also referred to as critical illness insurance.
Trauma insurance provides financial protection for you and your loved ones in the event that your life is turned upside down by serious illness. The benefit you receive can be used to:
Learn more about trauma insurance
There are certain circumstances under which a trauma insurance claim will not be paid, such as if:
Income protection insurance pays an ongoing monthly benefit to replace your income when you are ill or injured and unable to work. Most policies will replace up to 75% of your regular income and may also offer cover for involuntary unemployment.
You also have the freedom to choose:
Compare income protection insurance
Income protection insurance is an important consideration for many sole traders and small business owners, including tradies and basically anyone whose business relies on their ability to work in order to continue functioning. It’s also a worthwhile investment if the income you earn is crucial to your ability to pay the rent or mortgage and meet other ongoing expenses.
Income protection benefits can be used to:
Your income protection insurance claim will not be paid if:
Personal accident insurance, which is sometimes also referred to as accidental injury insurance, provides a lump sum payment when you are injured as a result of an accident. It covers injuries such as dislocations, fractures, severe burns and loss of sight or limbs, with different benefits payable depending on the type of injury.
It’s worth noting that personal accident insurance should not be confused with income protection insurance, which pays a monthly benefit when you are unable to work due to injury or illness.
Personal accident insurance is designed to provide a financial safety net to help you deal with unexpected injuries. Accidents can happen at any time and this type of cover can help you take time off work to recover, pay medical bills and rehab costs, and generally meet ongoing expenses until you get back to full fitness.
Get a quote for personal accident insurance
Personal accident insurance claims will not be paid if:
Funeral insurance provides a lump sum payment to your loved ones or beneficiaries when you pass away. This benefit can be used to cover the cost of your funeral and meet any other immediate expenses that may arise.
It’s quick and easy to apply for funeral insurance cover, with no medical tests required and guaranteed acceptance usually provided to applicants under 70 years of age.
Your death could place an unexpected financial burden on your loved ones, so taking out funeral cover will ensure that they have the financial support they need. This means they will not have to worry about money during this time of emotional stress and can instead focus on giving you a proper farewell.
Your funeral insurance claim will not be paid if:
Business expenses insurance provides an ongoing monthly benefit to help keep your business running when you suffer an illness or injury. You can use the benefits you receive to cover business overheads such as staff salaries, loan repayments, rental payments for your business premises and phone and utility bills.
If you’re a sole trader or small business owner and your business relies heavily on your ability to work in order to survive, business expenses insurance is well worth considering. The costs of running a business don’t simply disappear while you’re sick or injured, so having this type of cover allows you to ensure that your business doesn’t get into financial trouble while you’re out of action.
Business expenses insurance will not cover:
Key person insurance, sometimes also referred to as key man insurance, is a type of life insurance policy taken out on a key person in a business, such as a director, sales manager or business owner. It provides a lump sum benefit when the life insured dies or is unable to work due to illness and injury, allowing you to cover the cost of finding and training a replacement, settling outstanding loans and ensuring a smooth transition of ownership.
There are two purposes for which you can use the benefits of key person insurance:
If the ability of your business to turn a profit would be severely impacted by the loss of a key person, this type of cover is definitely worth a look. It allows you to protect your business against the impact of death or disability of your most important staff members and directors.
Key person insurance will not provide cover in a range of circumstances, including:
Are premiums tax deductible? | Will I need to pay income tax on any benefits I receive? | |
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Term life insurance |
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TPD insurance |
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Trauma insurance |
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Income protection insurance |
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Personal accident insurance |
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Funeral insurance |
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Business expenses insurance |
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Key person insurance |
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If you already have term life insurance in place, you might think you already have enough cover for yourself and your loved ones. However, it’s worth closely examining your financial obligations, as well as the impact an unexpected illness or injury could have on your financial position, before deciding whether life cover on its own is sufficient.
For example, if you were in a car accident and became totally and permanently disabled, you would not be eligible for a death benefit from your life insurance policy. However, you could have significant medical bills, rehabilitation expenses and home modification costs – and all while you may no longer be able to earn an income. But if you had TPD insurance as well as term life insurance, you would receive the financial support you need.
Similarly, would you be able to keep paying the mortgage and providing for your family if you were laid up due to injury or illness and unable to work? Without income protection insurance in place, you and your family could end up in serious financial difficulty.
With this in mind, it’s vital to consider a range of life insurance covers to make sure you have a sufficient level of protection in place.
While you can opt to keep your different life insurance policies separate if you wish, many insurers allow you to bundle different types of cover together. For example, term life insurance can be paired with TPD cover and trauma insurance, while if you’re a sole trader or small business owner, you may want to consider adding business expenses insurance to your income protection cover.
Combining cover can make it much easier to manage your life insurance, as you only have one policy and one premium payment to manage rather than several. It can also lead to significant savings, with most insurers offering sizable premium discounts to customers who bundle cover.
With so many different types of life insurance available, choosing the right cover (or combination of covers) can be difficult. Before you purchase any sort of insurance, take the time to consider your cover needs, including your financial obligations and the level of financial support your loved ones might require in a time of need.
Next, start shopping around for the right cover. Compare policies and quotes from multiple insurers, paying special attention to the benefits and exclusions each insurer offers. Look past the cost of cover to the features on offer to find the best value for money.
Finally, don’t be afraid to ask for help if you need it. An experienced financial planner can help you work out what type of cover you need and how much cover you require, and then help you choose the right policy.
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