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How to get life insurance

How to get life insurance

There’s a lot to consider when taking out a life insurance policy in Australia. From figuring out how much cover you want, to whether you want to add any optional extra benefits to your policy, here is a general rundown on what you can expect when applying and how to find a policy based on your needs.

Generally, people in Australia apply for life insurance policies in one of three ways:

  • Through their super (also known as group life insurance);
  • Via an insurance agent or financial advisor; or
  • Directly from the insurer.

If you have a super account, it’s highly likely that you already have life insurance. This is because most super funds offer automatic life insurance cover (along with total and permanent disability insurance and sometimes, income protection insurance). This insurance is for a specific amount and usually offered without answering any health and lifestyle questions or getting medical/blood tests.

It’s worth checking if you have life insurance already in your super and that this cover amount meets your needs. This is important, as while it’s quite common for people to have cover within super, this amount is usually an automatic figure without any consideration of your personal circumstances. Additionally, life insurance will not automatically be provided if you’re a new super fund member aged under 25, or your super account balance is under $6,000.

If you decide to purchase life insurance directly or via an agent/advisor, you’ll likely be asked a series of questions about your health and lifestyle and some may ask you to have a medical and/or blood test as part of your application. This is typically referred to as the underwriting process and is used by the insurer to evaluate and analyse how risky it is to insure your life, and they will then make a decision on whether or not to insure you.

The questions you’ll be asked are typically about your smoking status, job, height and weight, travel and residency plans outside of Australia, your medical history including your family’s, and if you engage in any risky or dangerous activities like motor racing.

Like any other insurance product, if your application is accepted and you’re offered a policy, you’ll need to make ongoing premium payments to keep your policy active.

Did you know? Choosi specialises in comparing a range of life insurance policies and makes it simple to apply for life insurance. By requesting quotes, you can talk to our Choosi agents (we call them Choosers!) and they’ll assist you in comparing policies so you can choose a life insurance policy that suits you. And the best part? You pay the same price as you would when buying directly — no extra fees involved! This is the Choosi Price Guarantee.

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Options when purchasing life insurance

There’s a lot more to life insurance than just insuring your life. In Australia, life insurance is a general umbrella term that includes many different types of cover such as:

  • Life insurance (also known as death cover): this covers you for death or a terminal illness diagnosis.
  • Income protection insurance: this cover helps you keep up with ongoing expenses if you can’t work due to illness or injury for a specified period of time by covering (generally) up to 75% of your pre-tax income for a period of time. This can be added as an optional extra or a standalone policy, depending on the insurer.
  • Total and permanent disability insurance or TPD (also known as permanently unable to work insurance): this covers you for a major impairment that prevents you from living independently. This can be added as an optional extra or a standalone policy, depending on the insurer.
  • Serious illness insurance (also known as critical illness or trauma insurance) covers you for selected specific illnesses such as cancer or heart disease. This can be added as an optional extra or a standalone policy, depending on the insurer.

Other things to consider for your life insurance policy could be:

  • The cover amount;
  • The number of people you’re looking to cover in your policy (you can insure just yourself or include your partner and children for some policies);
  • Any optional extras you may want to add to the basic life insurance policy such as serious illness or TPD;
  • The frequency you’d like to pay your premiums; and
  • How you’d like to pay.

You’ll need to decide exactly what type of life insurance policy is right for you as some may only cover you for very specific events, have certain exclusions, waiting periods, or expiration dates. On the other hand, some policies will come packed with features that you may not need.

When you compare life insurance with Choosi, we’ll ask you exactly which type of cover you’re looking for, including any optional benefits you may want. This means we’ll only show you relevant options that are matched to your needs. Narrowing down your options based on the information you give us can help you choose a policy that’s right for you.

What to know about pre-existing conditions

As with any insurance policy, life insurance is designed to protect you from unexpected future risks. When you go through the underwriting process to apply for a policy, you have a duty to take reasonable care to declare all medical conditions that you’re aware of, or should be aware of, based on your circumstances. If you’re already experiencing symptoms of a known medical issue, or being treated for it, this may be deemed as a pre-existing condition. Every provider has their own definition of a pre-existing condition so you’ll need to check how your personal circumstances could affect your cover before making a decision.

Depending on the insurer, and the condition itself, they may choose to exclude it from cover (which means you’re not covered if you die from that particular condition only), apply a premium loading for that condition (increasing the price of your premium) or reject your application for insurance altogether.

It’s important to note that purposely omitting information or being dishonest about your medical history is a breach of your duty to take reasonable care and could give the insurer the discretion to deny your claim or reduce the amount of cover you have.

Insurers are required to clearly define and specify any inclusions, exclusions, waiting periods, definitions of certain terms, expiry dates, and policy limits in the Product Disclosure Statement (also known as a Policy Document), so you should read and understand these documents so you can decide if the product is right for you.

If your application for a life insurance policy is approved, then you’ll have any specific exclusions or terms and conditions (also known as special provisions) from your policy listed in your Policy Schedule or Certificate of Insurance.

Can I get life insurance while receiving government disability benefits?

If you’re receiving government assistance for a disability, you may need to consider how your life insurance application could be affected. This is because government disability benefits usually only apply to those with a serious illness or injury, which could be classified as a pre-existing condition by an insurer.

Whether you can be approved for a life insurance policy while receiving government disability benefits completely depends on the insurer and the type of disability you have. As with any other medical condition, they may choose to exclude it from cover (which means you’re not covered if you die from it), apply a premium loading for that condition (increasing the price of your premium) or reject your application for insurance altogether.

Can I get life insurance without a medical exam?

The application process will vary depending on the insurer, but thankfully there are options for those who prefer not to have a medical exam and/or blood test when applying for cover. Some insurers allow you to apply just by answering some personal questions about your health and lifestyle.

Comparing and applying for policies with Choosi

Choosi makes applying for life insurance simple! We compare policies from a range of trusted life insurance brands, and we can talk you through the benefits of each one, so you can choose the policy that suits you and your family. Once you’ve chosen a policy, you can apply directly with no extra fees involved, and you’ll pay the same amount as you’d pay going direct, thanks to our Choosi Price Guarantee.

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This information is general only; doesn’t take into account your personal objectives, financial situation or needs; and shouldn’t be relied upon as advice. You should consider the relevant Product Disclosure Statement (PDS) for more information and to ensure the product suits your needs. If you have legal, tax, or financial questions, you should consult an appropriate professional.

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