What is Life Insurance?

Life Insurance is the umbrella term that refers to insuring your family’s current quality of life in the unfortunate event of injury, illness or death. It provides you with peace of mind by mitigating potential risk and easing financial burden, should one of these scenarios ever occur.

There are four primary types of Life Insurance:

  • Life Cover (also known as Term Life Insurance) protects your family against unforeseeable financial burden if you were to pass away unexpectedly, by providing them with a lump sum payment
  • Total and Permanent Disability (TPD) Insurance provides a lump sum benefit should you become permanently disabled as a result of illness or injury
  • Trauma Insurance (also known as Recovery Insurance) provides cover if you are diagnosed with a specified illness or injury, such as a stroke. If this was to occur, Trauma Cover provides a financial safety net for you and your family, allowing you to focus on recovery
  • Income Protection Insurance is specifically designed to cover your income if you are unable to return to work due to illness or injury. Instead of a lump sum like the other life insurance categories, Income Protection is a monthly benefit that covers up to 75% of your income

Policies, terms and conditions vary between Insurance Providers, so it’s always advised to read the Product Disclosure Statement (PDS) and compare covers before you apply for Life Insurance.

For more information about what insurance products are right for you check out our Life Insurance FAQs or speak one of our Life Insurance Specialists on 1300 041 494.

What are the Key Features of Life Cover?

When deciding which Life Insurance policy is right for you the following features should be considered.

  • Level of Cover. When selecting how much coverage you will need, it’s important to consider the lifestyle you wish your family to maintain were you to unexpectedly pass away. This may include your current living expenses, any outstanding debt (e.g. mortgage), your number of dependants and any future expenses (e.g. children’s education). This will help you calculate the level of cover you will need to fully protect your loved ones.
  • Premiums. Premiums are the regular instalments required for your policy, and the amount is determined by factors such as age, health, occupation and lifestyle. Premiums can come in a number of frequencies, however, monthly and annual are generally the standard for most insurers. Depending on your insurer annual premiums can attract a discount.
  • Terminal Illness Benefit. Depending on insurer, your Life Cover may include a Terminal Illness Benefit. This benefit allows the policy holder to access a portion of the insurance benefit immediately should the life insured be diagnosed with a terminal illness that is likely to result in death within 12 months.


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