How to compare life insurance products
[social_share]“The choices we make by accident are just as important as the choices we make by design.”
There are currently 28 registered life insurance companies in Australia, which means Australians have a lot of choice when it comes to protecting against expected death, accident or sickness.
To ensure you get the best outcome, consider the following when you compare life insurance products.
When is the policy underwritten?
A Life Insurance policy is a promise to provide financial support during a time of emotional difficulty. So it’s important that your policy deliver on that promise.
Underwriting is the process the insurer goes through to assess a customer’s eligibility for a life insurance policy. During underwriting, the insurer takes into consideration factors such as your age, gender, smoking status and medical history and in some cases may choose not to offer insurance.
In most cases insurers will underwrite before issuing a life insurance policy. However, some direct life insurance companies will forgo underwriting upfront to simplify the application process, but reserve the right to underwrite at claim time. The problem with this is that you may end up paying for insurance that you can never use.
Are there any general exclusions?
To help limit their risk, insurers will often include exclusions that apply to any policy holder.
Examples of general exclusions include:
- Suicide exclusion in the first 13 months
- Mental health exclusions for disability
- Exclusions if travelling in certain high-risk countries
- Exclusions for participating in certain high-risk pastimes
Before choosing a personal insurance policy, be sure you are fully aware of any exclusions that exist on the policy
Are there any important ancillary benefits?
In general most quality insurance policies provide the same core benefits. However, there are often additional benefits that you may find valuable. Some examples of additional Life Insurance benefits include:
- Funeral benefit
- Terminal illness benefit
- Financial Planning benefit
- Future insurability benefit
What is the cost?
Warren Buffet once said … “Price is what you pay. Value is what you get.”
In general, insurance companies charge according to the amount of risk they are taking on. So if you are paying less for insurance, there’s a good chance it’s because you are effectively taking on more of the risk.
However, not all insurance companies operate in the same way. Some charge higher premiums simply because their marketing costs (or distribution channels) are more costly. Some charge more for a bunch of “differentiating features” that in many cases you’ll never use.
The best way to save cost on your life insurance premiums is to work with an insurance specialist who can help you tailor a solution that exactly meets your needs. I.e. you pay only for the cover you need with a quality insurer who has a reputation of paying legitimate claims.
We can help
Our Life Insurance experts can prepare in depth comparisons between all of Australia’s top insurers and help you find the product that meets your unique needs.
Fill out our comparison form today and one of our risk specialists will contact you within 24 hours.
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