Given the important role life insurance plays in protecting Australians, you would expect life insurance to be easy to understand and even easier to obtain. Unfortunately, the insurance industry and Australian government have somehow managed to complicate things to the point the average person doesn’t know where to begin when it comes to getting the appropriate protection in place.
The following steps will help you simplify the entire process so you can finally get covered and stop worrying about being underinsured.
How much do you need?
Before you worry about which product, or which life insurance company you should choose, you really need to figure out how much of each type of cover you need.
The four main types of personal insurance are (click on each one to learn more about them):
- Life Insurance
- Total and Permanent Disability (TPD) Insurance
- Trauma (or Critical Illness) Insurance
- Income Replacement Insurance
Figuring out how much of each you need, is as easy as answering the following question.
If I was to suffer unexpected death, accident or sickness:
- How much income would I need replaced and for how long?
- How much debt would I want to pay off?
- How much would I want for unanticipated spending?
There are a number of calculators online, which take your answers to these questions and convert them to an amount of cover.
One of our favorites can be found here.
Choosing your product and Life Insurance Company
In all honesty, most of the well-known personal insurance products (e.g. AXA, TAL, CommInsure, etc) are fairly similar when it comes to the core protection they provide. Most of the differences are in the secondary features. That said, it is definitely important to read the product disclosure document (PDS) before choosing a product, to ensure your unique needs will be met by the product you select.
It’s also important to remember that the quality of aftermarket service is often just as important as the quality of the product itself and, in the case of Life Insurance, perhaps even more so. The last thing you want to deal with is poor service when you’re making an insurance claim.
A good way to ensure quality when you choose a life insurance company is to use an intermediary who has no connection to a life insurance company and can help you compare multiple products. If you walk into a bank and ask for life insurance, you can be guaranteed that they will be recommending the insurance product owned by the bank, regardless of whether there are better options available.
How to apply
Traditionally, life insurance was obtained through an insurance broker or financial adviser. And if you are looking for comprehensive protection, this is still really the only way to obtain life insurance. Unfortunately this method can be quite a cumbersome process; often involving lots of time, paperwork and (sometimes) medical tests.
Thanks to the internet, however, those with simpler needs (e.g. you just want some life and disability insurance to cover your mortgage) can now compare and apply directly online.
Through sites such as www.miplan.com.au you can obtain up to $1,000,000 in Life and Disability insurance in less than 10 minutes.
How we can help
Whether your needs are simple or complex, we can help you find the best personal protection solution. Simply submit your information here and one of our life insurance specialists will contact you within 24 hours.