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Life Insurance

Life insurance can be overwhelming when you don’t know what to look for. Find out what could be the best cover for you and your situation with our range of simple online guides.

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A Quick Guide to Life Insurance

A Quick Guide to Life Insurance

Making the decision to take out life insurance can create mixed feelings in many people. It is, after all, something we all wish we didn’t need, but know just how important it is to have. Once you’ve made the decision to take out a life insurance policy, knowing just what to include in the policy can be confusing. After all, there are so many policy providers out there making it hard to know what to include. The idea is to ensure that you and your loved ones get the most out of your policy if something were to happen.

If you’ve found yourself a little bit lost about where to start or what to look for, you’re not alone. But never fear, because Oiyo is here to help. This comprehensive guide should give you the tools to make an informed decision when choosing life insurance.

What is life insurance?

Life insurance is a type of insurance policy that can help protect you and your loved ones if something unexpected were to happen. This policy typically pays a lump sum payment to your beneficiaries upon the event of your death, permanent disability or terminal diagnosis that will result in death within the next 12-month period.

The idea of this lump sum payment is to provide financial support to the beneficiaries and prevent financial loss or hardship that can result from the death of the insured person. It is effectively a way to ensure that your family is protected after your death if the worst were to happen.

What does life insurance cover?

Life insurance can be used for a number of different reasons. It is designed to be versatile and effective to ensure that you or your family are able to continue on with no financial hardship. It helps prevent financial trauma that can be associated with the emotional trauma of the loss or serious injury of yourself or a loved one. Below we’ve provided some examples of the types of cover you can get from life insurance. Life insurance:

  • Helps your family continue to pay the bills and meet living expenses
  • Can cover funeral expenses to ensure your family doesn’t face financial hardship from these costs
  • Ensures you can continue to meet your bills or pay for rehabilitation in the event of permanent disability
  • Can help pay your bills and living costs if you’re seriously injured or terminally ill
  • Can pay for your care if you’re permanently disabled and you don’t have family to look after you
  • Allows your family to maintain their standard of living if you were the main income earner

As you can see, life insurance has many different uses. It could be pivotal to avoiding financial distress for you or your family in the event of serious injury, permanent disability or death.

Why is it important to have life insurance?

It is important to have life insurance to cover both yourself and your family in the event of an unforeseen situation. Things like medical expenses, funeral costs or ongoing care can be incredibly expensive and will just add more stress to an already extremely hard situation. By ensuring that you have these costs covered before the fact, you can make a hard situation that much easier to handle.

Not only will you ensure that your costs will be covered, but the financial help will also see that your family is able to meet their own financial obligations. This means they won’t be in any financial hardships if they relied upon your income to meet the bills and living costs.

How can life insurance calculators help?

Life insurance calculators can help you calculate a few different aspects of a potential life insurance policy. These can be very helpful when you’re deciding what kind of policy you will need. Most life insurance providers will have a calculator on their websites that you can use. These calculators take a lot of things into consideration such as your family details and your assets.

Life insurance calculators should provide you with a result that is general in nature and should only be seen as a starting point. If you need something more tailored to you and your personal circumstances, you should consult a financial adviser. They’re quite useful because they can prepare you with the information to make an informed decision on a life insurance policy. This calculation will generally indicate:

  • Whether you need life insurance at this current time
  • How much insurance you might need
  • What kind of expenses your cover will pay for if you do pass away

Who are some quality direct life insurance providers?

There are many different life insurance providers for you to choose from when you do decide to take out a policy. Having a lot of options means you have the opportunity to find the policy provider who offers exactly what you’re looking for. On the other hand, having an array of options can be a bit overwhelming. After all, where do you even start? How do you know which provider will suit you the best? Don’t stress. We’ve done a comparison to give you a better idea of some of the players in the direct life insurance market (where cover can be purchased directly from a provider).

Below, we’ve prepared a breakdown as of June 2020 of part of the product offering of 3 key players in the direct market.* Although price might be your biggest concern when making your decision on choosing a policy, there are a number of other core features that should be taken into account.

*insurance policies may be subject to change with time.

NobleOak Life Insurance

  • Minimum cover: $50,000
  • Maximum cover: $15,000,000
  • Terminal illness benefit: Up to maximum $3,000,000
  • Maximum entry age: 69 years
  • Minimum entry age: 16 years
  • Funeral benefit: $15,000

Interim Accident Cover✔

Type of Cover ✔/✖
Fully Underwritten
Guaranteed Renewability
Total and Permanent Disability (TPD)
Trauma Option
Increase cover without the need for medical assessment
Counselling Benefit
Child Benefit Option
Frequent Flyer Points Offered

You can visit or request a life insurance quote on the NobleOak website here.

Real Family Life Cover

  • Minimum cover: $100,000
  • Maximum cover: $1,000,000
  • Terminal illness benefit: $1,000,000
  • Maximum entry age: 64 years
  • Minimum entry age: 18 years
  • Funeral benefit: $10,000
Type of Cover ✔/✖
Interim Accident Cover
Guaranteed Renewability
Total and Permanent Disability (TPD)
Child Benefit Option
Fully Underwritten
Trauma Option
Increase cover without the need for medical assessment
Counselling Benefit
Frequent Flyer Points Offered

You can visit or request a life insurance quote on the Real Insurance website here.

MediBank Life Insurance

  • Minimum cover: $100,000
  • Maximum cover: $2,500,000
  • Terminal illness benefit: $2,500,000
  • Maximum entry age: 70 years
  • Minimum entry age: 16 years
  • Funeral benefit: $15,000

Total and Permanent Disability (TPD)✖

Type of Cover ✔/✖
Interim Accident Cover
Guaranteed Renewability
Trauma Option
Increase cover without the need for medical assessment
Child Benefit Option
Fully Underwritten
Counselling Benefit
Frequent Flyer Points Offered

You can visit or request a life insurance quote on the Medibank website here.

As you can see at just a glance, different providers have different inclusions in their policies, as well as different levels of cover. When deciding on a life insurance provider, it’s important to look at all aspects of the policy, not just the cover amounts as you may miss out on something that might be incredibly important to you, such as injury cover. Considering just how many people end up claiming on their life insurance policies in some form or other, it’s important that you and your family are covered for every eventuality.

How do you make a claim?

Making a claim on your life insurance policy is a fairly straightforward process. You will need to supply the insurance company with the appropriate documentation. Here’s a general rundown of how to make a claim:

  1. Begin by contacting your insurer to make the claim. They’ll be able to advise you of the specific application process
  2. Provide the insurance company with the applicable certificates to verify the claim. The type of certification you will need to supply will vary depending on why you’re claiming but this could be a death certificate or a medical certificate demonstrating an inability to work due to illness or injury
  3. You’ll likely be asked to fill out some forms by the company, asking you to verify details like the policy number, payslips or financial statements of the insured individual
  4. Finalise the details and submit your claim with the insurance company. Generally, a decision on your claim can take up to 2-months to be finalised

Why it’s better to get life insurance young

You may be wondering why exactly you might need life insurance if you’re young and healthy, right? After all, it’s an expense that you may end up paying for for years and not need until far into the future. While this is a valid argument, what many don’t know, is that life insurance can be used to pay off your debts if something unexpected were to happen to you sooner than expected.

Another perk of getting life insurance when you’re younger is the fact that life insurance is cheaper when you’re young and healthy. Age is one of the biggest factors when determining your policy premiums. Quite simply, purchasing insurance while you’re young can save you a whole heap of money. It’s a great idea to take advantage of these reduced premiums while you can. It’s recommended by experts to have purchased an insurance policy by the age of 35, to ensure that you get some of the best rates.

What other options are available?

If you’re still on the fence about purchasing life insurance, that’s okay! Having a look at your other options is a great way to make sure you choose the best option for you.

Saving and investing your money

Many who don’t opt for life insurance, will instead choose to save and invest their money to create a nest egg to cover an unexpected occurrence. This can be a great option for people who are committed to saving/investing. With a bit of self-determination and dedication, you can ensure that you and your family are covered for the future.

Mortgage insurance

If you don’t have any significant debts other than a home loan, you can always opt for mortgage insurance instead of a full life insurance policy. Mortgage insurance basically covers the costs of your home loan if something were to happen to you and you were unable to make your home loan repayments in the future. Home loans tend to be extremely large debts. Therefore, this could be a great alternative for those who are worried about their home loans falling on their loved ones if they are unable to work due to disablement.

Accidental death and dismemberment insurance

This is a type of insurance where the beneficiary of the insurance is paid a benefit if the policyholder is permanently injured or dies due to an accident. This type of insurance can be an additional add on to your life insurance policy or you’re also able to purchase it separately and have it as a stand-alone policy that is cheaper than life insurance.

Is life insurance worth it?

Life insurance is a fantastic option for anyone looking to take care of their family after they are no longer able to work or pass away. It’s a great option for those who are worried about their family being financially disadvantaged and not being able to pay their living expenses or taking on a large amount of debt, funeral expenses or on-going care and medical expenses. It’s one of those insurance policies that are better to purchase when you’re younger and can provide a huge amount of relief financially and emotionally in an already tough situation.

Life insurance might not be for everyone, but that’s okay because there are always alternatives. For those who do want to opt for an insurance policy, there are so many providers to choose from that they will be able to tailor their policy to include what is most important to them.

Get the lowdown on different investment options and how they could grow your nest egg.