Life Insurance

It's simple with Yes Insurance Solutions

Many people think Life Insurance is complicated. But at its heart, it’s very simple.

Life Insurance is your children being able to stay at school; your family keeping their home; and your partner being able to live the life you’ve planned together. That’s what Life Insurance is really about: protecting the ones you love and the choices and options you’ve worked hard to create.

Mark and Susan

Here’s an example of how Life Insurance works

Mark is 54 when he passes away from skin cancer, leaving his wife Susan with a $500,000 mortgage and two school-age children. While Susan is already working part-time, the income isn’t enough to cover their ongoing commitments. It is also important to Susan to have enough time for the kids, and she isn’t sure if a full-time job would allow that.

After Mark’s estate has been finalised, Susan receives an $873,000 Life Insurance payment. This means Susan can raise the kids without financial pressure, and continue enjoying the lifestyle she and Mark had worked hard to create.

Life cover is one type of cover that falls under the heading ‘life insurance’.

Other types include total and permanent disability cover, trauma cover, and income protection cover. Life cover is also known as term life insurance or death cover. It pays a set amount of money when the insured person dies. The money will go to the people you nominate as beneficiaries on your policy. If you have not made binding nomination then a Trustee or your estate will determine where the money goes.

Talking about dying isn’t easy. But it’s worth some thought. By setting up a way to support your loved ones after you die, you can ensure they can continue to pay the mortgage and school expenses, go on holiday and buy essentials.

Do you need life cover?

Smart tip

When purchasing life cover, take into account what other types of life insurance you need, such as income protection and disability cover.

When deciding how much life cover you want, think about:

  • All your debts
  • Your children’s future childcare and education costs
  • How much income your family will need to live comfortably

Life cover is ‘guaranteed renewable’, meaning it will generally only stop if you stop paying for it. It will continue even if you suffer an illness or injury, which would otherwise prevent you from taking out life cover.

Think about what you want to cover. For example, you may want to cover your mortgage, education costs for your children and credit card debt. It is important to remember that the higher the level of cover, the higher your premiums will be. Ask yourself how long you want to hold your life insurance for and make sure you can afford to pay the premiums over time, especially if your premiums rise each year.

Consider whether your family could sell your home and move somewhere else or downsize to raise money to pay off your debts or mortgage.

When researching life cover options, note the difference between the type of life cover discussed on this webpage and ‘accidental death’ cover, which is not guaranteed renewable and only covers you if you die in specified ways. Always ask lots of questions until you understand exactly what you’re getting.

Life cover tips. Here are some other things to do when choosing life cover:

Discuss it with your family

Don't only insure the highest income earner in your household

Be realistic about how much cover you need

Decide whether you want stepped or level premium

Read the product disclosure statement (PDS) to find the benefits and any limitations on your cover

Once you know which cover and how much you need, shop around to compare costs with at least two other insurers

Check if your product is inflation-indexed so your cover keeps up with the cost of living

Things you need to tell your life insurer

You need to tell your insurer anything that could affect their decision to insure you when you are applying for, renewing or changing a life insurance policy. You also need to tell the life insurer about things that have happened between the time you apply and when the insurance cover starts.

Some life insurance companies need you to give them details of your medical history. If you don’t have the information they require you can get it from your doctor. If you don’t give the insurer this information they may refuse your claim and this could affect any life insurance you apply for in the future.

Don’t pay too much, talk to us first!