Taking out life insurance for your family could be one of the best decisions you ever make in life.
Should something happen to you, receiving a lump sum of money could help them pay living expenses.
So, let’s explore what life insurance is, how it works and why thousands of Australian families find it so valuable.
While there’s no such thing as a product called ‘family life insurance’, you can take out term life insurance to cover members of your family.
A term life insurance policy may pay out a lump sum to your beneficiaries if you, or anyone covered by the policy, pass away or are diagnosed with a terminal illness. This means everyday expenses (mortgage repayments, school fees, household bills etc.) could get paid.
Australians can choose from the following life insurance options:
Beside the above cover, different policies may include other benefits like funeral cover, child cover (may cost extra), financial planning services and grief counselling.
A life insurance claim may not be paid if it’s the result of an event or condition that’s excluded by your policy. It’s important to read your Product Disclosure Statement (PDS) and policy document to find out exactly what’s covered in your policy.
For example, if you’ve taken out a total and permanent disablement (TPD) or trauma insurance policy, it typically won’t pay out if you or family member(s) have become disabled as a result of an intentional, self-inflicted act or attempted suicide.
It’s also important to remember that not all life insurance policies cover children. If you want life insurance for kids, you may have to add on child cover separately, at additional cost.
Life insurance can help cover costs when your family is left with one less income. There may be several immediate expenses to pay for, such as hospital or funeral costs. On top of that, there are also long-term expenses life insurance could help cover, including:
Life insurance for children? While you can’t take out a standalone policy for children under 18, you can add them to your policy. Depending on the policy, it may cost extra to add child cover to your policy.
If you decide you require life insurance for your children, you need to organise cover in advance that would help cover medical expenses should they ever become seriously injured or ill. Life insurance for kids can typically cover death and terminal illness. In addition, some policies may also cover:
However, it will vary depending on your policy and insurer, or be subject to specific terms and conditions. For example, your policy may not cover cancer (unless it’s at an early stage), heart attacks, strokes or any known pre-existing conditions that led to your child’s terminal illness or death.
Raising a family is expensive – especially when one parent is no longer around. That’s why it can be essential to make sure your policy provides enough money to cover your family’s expenses, should you choose to get insured.
According to our life insurance calculator, you may wish to consider around $1,000,000 in life insurance cover if you have:
However, when calculating how much life cover your family needs, you may also consider:
The cost of life insurance in Australia will depend on many factors, including:
For a clear picture, get a life insurance quote.
Life insurance can cover either the person who takes out the policy, your partner, or the two of you (with a joint policy). However, if you want to take out life insurance for a family member, you can only do so with their knowledge.
Insurers may require a signed and verified personal statement about the insured family member’s situation (age, health, occupation) to assess their insurance risk.
You can easily compare life insurance quotes for your family in seconds through us. Just answer some questions about your situation, and we’ll show you several options side-by-side, allowing you to compare prices and features of policies we offer.
The information provided here is general only and does not consider your personal objectives, financial situation or needs. Before you decide to purchase a product, it is important to read the relevant PDS.