Life Insurance Blog

Combining life and health insurance


Many providers will offer combined life and health insurance.  Although these can offer some real benefits the life and health insurance joint offers should be carefully monitored.

The biggest benefit is that there can be cost reductions for a joint policy.  This is because the administration costs are greatly reduced as well as marketing costs.  Because the insurance company is going to make more profit then they are also willing to share some of the cost savings with the premium buyer.

Another cost that can be saved is the cost of a medical examination.  This is often insisted on by both medical and life insurance companies, particularly for older applicants or applicants with a history of health problems.  If it is the same company that is selling the products then a combined health examination will become possible.  As the medical examinations test slightly different things for life and health insurance then the medical examination will be slightly longer and possibly more expensive than a single insurance examination.

This can save a considerable amount of money if the examination is directly paid for by the insurance applicant.  If the insurance company is paying for the medical examination then there should be a further reduction in the insurance premium.

There are other similar policies that can be bought together with life insurance.  The most common of these is permanent disability insurance which gives money to people who develop a disability that will make them unable to work.  As the premiums for this type of insurance can depend on the presence of pre-existing conditions companies offering these policies can insist on a medical examination.  This means that the medical examination can be fitted together as well as the other insurance policies that are seemingly unconnected may be offered in a package so saving on administrative and marketing costs.  These can include home insurance and even car insurance.

There are some potential issues.  Firstly combined policies are unlikely to be either the cheapest of the policies around or the best of breed.  It can often be the case that by separating the two policies that the best policy can be chosen for each of the two needs.

Another issue is that the policies that are already taken out may run out at different times.  Although policies can be cancelled or taken out for a shorter time, this can be more expensive.

Stephen Handley
Stephen Handley
My name is Stephen Handley. I have over 20 years experience in IT, Project Management and Financial Services. By combining this experience, I hope to make it easier for Australians to find good quality and affordable life insurance. Furthermore, I am not connected to any life insurance company. So, in the unfortunate event of a claim, you'll have someone in your corner, representing your interests.