Life Insurance

When determining how much life insurance you may need, it is important to think about:

• Your current debt – i.e. your mortgage, personal loans and credit cards
• The number of dependants you have
• Your current income
• Future education expenses for your children – i.e. school and university fees
• Ongoing household expenses, including utility bills, groceries and insurances
• Lifestyle costs – sport and music lessons, birthdays, and holidays
• Childcare and home assistance – if you or your spouse are a stay-at-home parent, you may need to cover the cost of home help to help look after the children and manage running the household

You can use our life insurance calculator to estimate your life insurance needs

The cost of life insurance in Australia depends on a variety of factors, like your age, gender and whether you smoke or not. It also depends on your occupation and lifestyle, your medical history, and the level of cover you choose.

If you are trying to find the best life insurance for you, you may find that life insurance with NobleOak costs less than you think. For example, if you are a 35-year-old non-smoking male, you would pay approximately $30/month for cover worth $500,000. If you are a 35-year-old non-smoking female, you would pay approximately $25/month for the same cover.

At NobleOak, premiums can be paid monthly or yearly to suit your budget. We let you choose the types and amounts of cover you want, and you only pay for the cover you choose.

Get a life insurance quote now to see how affordable it can be for you.

As an adult there is generally no bad time to apply for cover. The truth is, other than a small number of exceptions, the younger you are when you take out insurance, the less you will pay.

Often people consider life insurance along with significant life changes such as getting married, buying a home, and taking out a mortgage, starting a family or approaching retirement.

Whatever life stage you are at, life insurance may be an important consideration, helping provide financial protection for your loved ones if you were to pass away.

A premium is the regular payment you make to ensure your policy remains in-force and you are protected in the event of a claim. Life insurers in Australia may offer the option of taking stepped or level premiums.

NobleOak’s range of life insurance products only offer stepped premiums. This means your premium will increase each year at each policy anniversary, based on your age.

The annual premium increases because the probability of you needing to make a claim increases as you get older. For younger individuals, you may find your premium is initially lower (compared to a level premium structure), however will accelerate slightly each year as you get older.

In contrast, with a level premium, the cost of life insurance is spread evenly over the life of the policy. Typically, your premium would be more expensive than a stepped premium option for your age when you take out a policy, however tends to become cheaper (when compared to a stepped premium option) as you get older.

Term life insurance provides coverage for a specific period (term) and pays out a death benefit if the insured person passes away during that term. With NobleOak Life Insurance, you can maintain your cover up until the age of 99.

The most suitable age or life stage to buy life insurance can vary depending on your individual objectives, financial situation and needs. However, there are some general guidelines that can help you determine when it might be a good time to purchase life insurance:

When you’re young and healthy: Life insurance premiums are typically lower when you are young and in good health. Buying a policy early may result in lower rates for the duration of the policy, as you won’t be re-underwritten for later health issues.

When you have dependents: If you have a spouse, children, or other dependents who rely on your income to cover their living expenses, it is a good idea to consider life insurance. This helps provide financial support for your loved ones in case of your untimely death.

When you have debt: If you have significant debts, such as a mortgage, student loans, or credit card debt, life insurance can help cover those debts, so they do not become a burden on your family if you pass away.

When you want to leave a legacy: If you want to leave an inheritance or financial legacy to your loved ones or a charity, life insurance can help ensure that your beneficiaries receive a tax-free payout upon your death.

When you want to cover final expenses: Even if you do not have dependents, life insurance can help cover your funeral and burial expenses, relieving your family of this financial burden.

It is important to assess your specific objectives, financial situation, goals, and responsibilities to determine the best time to buy life insurance. Your life insurance needs can also change over time, so it is a good practice to periodically review and adjust your coverage as your circumstances evolve.

People often purchase multiple life insurance policies for various reasons, such as to increase their overall coverage, diversify their investments, or meet different financial needs.

Here are a few reasons why someone might consider having multiple life insurance policies:

Income Replacement: If you have dependents and need to provide for their financial security in the event of your death, you might purchase one policy to cover immediate expenses and another to cover long-term needs, such as mortgage payments and school or university fees.

Diversification: Some people choose to diversify their insurance coverage to spread risk and manage costs. This can involve having policies from different insurers.

Topping up life insurance within superannuation: Some people may decide to top up their life insurance in their superannuation if they feel it falls short of their needs. The Rice Warner ‘Underinsurance in Australia 2020’ report indicated there is a gap between how much cover many Australians have through super, and how much they may need. The report reveals, “the median default cover of superannuation funds meets approximately 65% to 70% of basic level death cover needs for average households, but a much lower proportion for families with children.”

If you are thinking about purchasing or holding multiple policies: Keep in mind that when you apply for multiple policies, insurers may require you to provide information about your existing coverage, and they will assess your eligibility based on your medical and financial situation. Additionally, premiums will be based on factors such as your age, health, and the type and amount of coverage you are seeking.

References:

https://www.ricewarner.com/new-research-shows-a-larger-underinsurance-gap/

Life insurance (death) payouts can be tax free, particularly when they are paid to someone who is dependent on you, such as children under the age of eighteen. Trauma (critical illness) insurance and total and permanent disability (TPD) insurance benefits are also typically paid tax free.

However, claim payouts made under income protection insurance are typically taxed.

This is NobleOak’s current understanding of the general tax treatment of life insurance, TPD and income protection benefits. You should seek specific advice from a tax professional to understand whether this applies to you.

When naming an insurance beneficiary, you will need to check your policy to establish who counts as a financial dependant. Spouses are commonly accepted, but there are more restrictions around children over the age of eighteen, who are often not regarded as financial dependants when it comes to receiving a lump sum and therefore may be taxed. If life insurance is purchased through a superannuation fund, the benefits will be paid to the trustee.

These products are mentioned above and include income protection, TPD insurance and trauma (Critical illness) insurance. Choosing the right life insurance product depends on your individual needs, financial situation, and priorities. Each type of insurance serves a different purpose, so it is important to understand the features and benefits of each to determine which ones align with your needs and goals. Here’s a brief overview of each:

• Income protection insurance pays a monthly benefit if you become ill or injured and can’t work because of that illness or injury.

Useful for: Helping to manage living expenses and medical costs.

• TPD insurance is a lump sum payment if you become permanently disabled as a result of a sickness or injury and are unable to work again.

Useful for: Helping to manage living expenses, medical costs, and any necessary modifications to your home in the event of a severe disability.

• Trauma insurance provides a lump sum payment if you are diagnosed with a specified serious medical condition.

Useful for: Providing financial support to cover medical expenses, debt repayments, or lifestyle adjustments during a critical illness.

This article has answered some of the key questions that you might have on your journey to buying life insurance. It may also be helpful to visit a comparison site such as Canstar or Finder to be able to compare various life insurance policies and further determine what suits your requirements before you take the next step.

NobleOak’s range of Life Insurance products use stepped premiums. This means your premiums will increase each year with your age.

The annual premium increases because the risk of you needing to make a claim grows greater with age. It might increase up to about 2% per year if you’re under 30, but as you approach middle-age, the increase in your premium will rise to a greater percentage of about 5-7% per annum.  It sometimes increases more than this.

In addition, your premium will increase each year to guard your cover against inflation. This helps ensure your level of cover remains relevant to your needs. You do have the option to stop the indexation of your cover if you prefer, in which case any rise in your premium will only be due to your increasing age.

Once issued, NobleOak insurance cover is provided for worldwide travel and residence 24-hours a day, subject to any special terms and conditions NobleOak may apply at the time of acceptance.

So whether you are heading on the trip of a lifetime or moving overseas, provided your cover remains in-force you can travel with peace of mind.

Before you jet off into the sunset, you should always check with your insurer as additional conditions may apply to your cover.

Countries excluded from cover

Some countries are excluded from cover mainly due to political unrest, war or natural disaster. As these are subject to change we recommend that you always check with your insurer before travelling overseas to make sure you are covered.

If you choose to remain in a country or part of a country where an Australian government ‘reconsider your need to travel’ or ‘do not travel’ travel warning has been issued, or an evacuation has been coordinated, you may not be covered. Again, it is recommended you check with your insurer if this occurs whilst travelling.

Other exclusions unique to you

In rare cases, travel exclusions may apply based on your individual circumstances. If this is the case, they will be determined during the initial application process and agreed with you.

Remember, always check current travel advice

The Australian Government recommends all travelers check current travel advice, which it maintains for more than 170 destinations on the Smartraveller website.

The advisories highlight potential threats to security, safety and health that you could face at your destination, and counsel on local laws that may differ from those at home. To ensure you are protected, we recommend that you still check with your insurer before travelling overseas to make sure you are covered, even to low risk destinations.

Make sure your Insurance is up to date

Travel to even the safest destination can be risky, so it is a good idea to have your affairs in order before you go. Life Cover can help to provide financial security for your loved ones in the event of your death.

Income Protection Insurance can help you to cover the costs of living if you are unable to work due to illness or injury. For Australian workers heading overseas to work, provided your cover remains in-force, you will be eligible for Income Protection benefits.

However, in the event of an Income Protection claim there may be additional requirements and conditions should you be working overseas. If you are moving overseas for work, either temporarily or for an extended period, we recommend you check with your insurer what additional requirements may be placed on your cover.

Life Cover is intended to provide financial security to the loved ones left behind in the event of sudden and unexpected death. But what happens if that death occurs due to a suicide? Will the policy pay out, or will the insurance cover be voided?

Although you will hopefully never need to use this information, it is important that you understand your rights and obligations should you ever lose a loved one to self-harm and then need to make a claim on their life insurance.

How it works

A life insurance policy will generally not pay out for a suicide that occurs within 13 months after the inception of the cover. This is to safeguard the life insurer where the life insured may have taken out cover with the sole intention of committing an act of self-harm.

The insurer may also need to review the life insured’s full medical history in some instances to check if there were any significant mental health issues in the past which the life insured may not have disclosed at the time of underwriting. Failure to disclose all relevant information to the insurer could possibly necessitate a claim being denied if these details were considered to have been a material factor in the death.

It’s important to be aware that if the life insured has changed insurers, or increased their level of Life Insurance cover, the 13 month suicide exclusion period may be applicable either to the full cover or the increased portion of the cover.

NobleOak’s policy on suicide

NobleOak’s Life Insurance excludes death by suicide only for the first 13 months after the cover originally commenced, or for 13 months for the increased portion of any cover.

After this 13 month period has expired, if the life insured’s death was confirmed as having been caused by their own hand, we will not void the cover and we will generally look to pay the claim subject to our normal claims review procedures.

If you would like to change the level of cover on your NobleOak Insurance plan, please send us your written request to:

• decrease your cover – this would not require you to go through any further underwriting.
• Increase your cover – you would be required to complete a new application and go through the full underwriting process.
  If you would like to discuss changing the cover on your plan, you can speak to a friendly NobleOak insurance specialist on 1300 551 044.

Australian residents between the ages of 16 and 69 can apply for up to $15,000,000 in cover.

You can increase your life cover amount by the lesser of $100,000 or 20% of the original cover amount without the need to provide further medical evidence if one of the following allowable events occurs:

• You take out or increase a mortgage on your primary place of residence
• You marry, register a partnership, or commence a de facto relationship recognised by law
• You or your partner gives birth to, or adopts, a child
• Your child starts secondary school
• You get divorced
• Your spouse passes away

You can fix the cost of your insurance cover at any time by writing to us with a request to freeze the premium amount. This means that your future premiums will be fixed at the amount you were paying on the date of notification. This means that your future premiums will be frozen at the amount you were paying on the date you notified us and your cover amount will be adjusted accordingly each year. You can ask us at any time to end the Premium Freeze Benefit and the freeze will end on the next anniversary of your cover.

We will reimburse up to $1,000 of the cost of grief counselling services for you, your spouse or your partner, if we pay a benefit for death or terminal illness.

We will reimburse up to $2,000 of the costs of engaging a qualified financial adviser to prepare a financial plan with the proceeds of a death and terminal illness claim, if we pay a benefit in excess of $200,000.