Cancer survivors can apply for life insurance (acceptance depends on the insurer’s underwriting policy). Like other pre-existing medical conditions, successfully taking out life insurance as a cancer survivor depends on a variety of circumstances and eligibility.
It is imperative to disclose your pre-existing condition, such as cancer, to your insurer or your paid benefit may be refused. When reviewing your application, it is common for insurers to seek further clarity on your condition, such as if you are in remission, or if you take any form of medication, to determine the nature and severity of your case.
Some funds may charge a higher premium on your life policy as an assurance to cover your heightened level of risk.
Understandably, suicide is a tough subject to address. However, it is one that should not be avoided, as it may have implications on your life policy. Most life insurers will not pay a claim for death caused by suicide or attempted suicide within the first 13 months from taking out your chosen level of cover.
Depending on your insurer and your policy’s Product Disclosure Statement (PDS), no death benefit will be paid out within this timeframe, and the conditions may be reassessed after the initial 13 months have passed.
There may also be standard exclusions for claims caused by deliberate self-harm, such as harm inflicted in the course of a suicide attempt on total and permanent disability (TPD) insurance, trauma, and income protection policies.
If you or anybody you know needs help, please contact Lifeline, beyondblue, or a relevant medical professional.
In many cases, yes. Many policies have the option of adding children’s insurance to their life cover policy. Children’s cover can pay a lump sum in the event of the insured child passing away, being diagnosed with a terminal illness, or suffering from a serious injury (each policy varies in what the insurer covers as a specified illness or injury).
Children’s insurance can usually be taken out between the age of one and 18, and may cover them until they reach their 21st birthday. Children’s life cover can insure your child for death due to accident or illness, terminal illness (with life expectancy less than 12 months, for example), and a range of specified illnesses or injuries outlined on your child’s life cover policy.
Aside from children’s life insurance, most providers also offer trauma cover as an option for your child’s cover, which can be added to your life cover. Depending on your insurer, policy and type of cover, these options pay benefits in the event that your child suffers from an illness or injury specified in the relevant Product Disclosure Statement, and can be purchased by parents, grandparents, or a legal guardian.
Most insurance providers will require applicants to meet very specific criteria when processing an application where HIV is involved. Some insurers deem HIV too great a risk, and will not cover applicants if they are living with this medical condition.
However, some insurers may offer cover for HIV-positive applicants, often under the condition that you pay a loading on top of your premium, or your policy excludes cover for your health condition. Your disclosure of HIV to your chosen life insurer is treated confidentially and is protected by relevant government legislation.
Australian citizens and permanent residents have access to life insurance provided they satisfy the criteria of the provider. Most insurance providers will have a minimum and maximum age limit when you can apply for cover, which vary depending on your chosen fund.
Non-Australians residents may be able to purchase life cover if they meet certain standards set by the insurer. Whether they can be insured may be based on factors like which country they are a citizen of, how long they have resided in Australia, how long they intend to continue residing in Australia, and their travel plans, for example.
Information disclosed in the application process may be deemed by an insurer as being ‘high risk’ due to a number of factors relating to your health and lifestyle. In such instances, your insurance fund may impose an exclusion clause or a loading on the policy as a result.
If an applicant has a pre-existing condition (e.g. they previously experienced a heart attack), it is likely that an increase in premium will be applied to the policy due to the additional risk of death.
Loadings are usually scaled, starting at a certain percentage of the premium’s original cost, increasing thereafter, depending on your level of risk and if there is a higher probability that you are going to claim in the future. The ratio of the applied loading will depend on the level of risk respective to the condition, and is based on the information you provide to your insurer upon application. You may also be required to provide evidence of your condition during the application process.
It may be tempting to omit certain details to save on your premium; however, it is imperative that you disclose all pertinent information about your health and lifestyle when applying for life insurance. Failure to disclose all material facts could result in your claim being declined, and/or your policy being cancelled.
Most superannuation funds will have a default life insurance cover incorporated into your account. This level of life insurance may not be suitable for your particular family situation.
If you do have life insurance through superannuation, you may want to examine the pros and cons in regards to the level of cover it provides. The advantage of life insurance is that it may pay a significant cash benefit in the event of your death or terminal diagnosis – a benefit that you get to articulate to the insurer, based on your household’s future needs. Specific features, benefits and even types of cover may also not be available through super, for example, Trauma Insurance is not available through super.
Your life insurer may cancel your policy based on a variety of factors. As a rule, your insurer may cancel your life insurance policy if you have:
Your life insurance could take a week or several months to pay out, and will vary on a claim-to-claim basis. Typically, you can receive a funeral benefit in advance once the insurer has confirmed and received the death certificate. A family member, or the beneficiary listed on the policy, will usually have to collaborate with an allocated case/claims manager from your life insurer during this process.
In 2016, the Australian Prudential Regulation Authority (APRA) reported that roughly 92% of life insurance claims were finalised, with about 8% being declined.
Most life insurance funds will require your intentions in writing (with confirmation), which only takes 24-48 hours to process. Depending on your insurance provider, you may be able to reinstate your policy within a period of time from the cancellation date, provided their terms and conditions are met.
Before cancelling your life insurance, you should consider whether you wish to compare and switch to a new policy before cancelling your existing cover, to avoid a gap in cover, or risk that another insurer may not cover you. Given that your circumstances may change over time, it’s always important to review your policy and premium regularly.
Most superannuation funds will have basic life insurance cover incorporated into your account. According to the Australian Securities and Investment Commission (ASIC), default super funds must have a minimum level of life insurance.
Life insurance through superannuation usually has a limited death benefit, which may leave many Australian families insufficiently cared for in a difficult time. If you do have life insurance as part of your super, you may want to examine the pros and cons in regards to the level of cover it provides.
The main advantages of life cover through superannuation are:
The main disadvantages of life cover through superannuation are:
In general, you can take out more than one life insurance policy. If you are looking for additional coverage, then purchasing multiple life insurance policies may be worth considering, especially if you believe your current level of cover will not sufficiently cover your family’s debts and expenses.
Other common types of additional policies purchased include income protection, total and permanent disability (TPD) insurance, and trauma insurance – all of which can be bought separately or on top of life cover.
In most cases, you should receive a payout from each purchased policy in a claim, provided you have met the provisions of each policy. It is common for an insurer to require that you disclose other policies you hold with other providers, and whether you intend to keep those policies or not, before they decide whether they can offer you cover too.
In some cases you may be required to have a medical examination or blood tests during your application process. This may depend on factors such as your current health status, if you’re a smoker, your age, the type of cover you choose, and how much you opt for.
Common examinations include, but are not limited to: blood tests, physical measurements (body mass index), blood pressure assessments, and urine tests.
Should you require a medical examination, the insurer will cover examination-related expenses in most cases.
The Product Disclosure Statement may indicate whether a medical examination may be required or not. You can check the PDS, or contact the insurer or your adviser to ask.
Indexation is a common economic technique used to adjust and keep your sum insured and payments in line with inflation as measured by the Consumer Price Index (CPI) in Australia.
The sum insured changes for inflation, meaning your premium is subject to change also.
The chief benefit of comparing and buying life insurance through our free and user-friendly service is that you’re in control.
So, if you’re in the market for some friendly and useful advice on the benefits of comparing life insurance products, then get in touch with one of our friendly consultants today.
Always ensure you’ve read and understood the Product Disclosure Statement (PDS) before settling on a particular policy. Alternatively, get in touch with one of our qualified life insurance consultants on 1800 204 124, who will be happy to assist you with questions and tailor quotes around your requirements.
At Compare the Market, we’ve helped thousands of Aussies last year find life cover. If you’re ready to review your options, head straight over to our online comparison tool.
Otherwise known as ‘combined life insurance’, joint cover is a convenient option for you and your partner to be placed under the one policy, rather than two separate policies.
The primary drawcards for joint cover are single premium debits, single policy management, and the potential for discounts (provided your insurer offers them). Joint life insurance policies can be tailored around you and your spouse’s circumstances, and if one of you happens to pass away, will be paid out according to your level of cover.
For further information, refer to the Product Disclosure Statement (PDS) of the policy you and your partner are considering.
Your beneficiaries will generally not pay tax on a life insurance benefit payout when you own your own policy.
Accordingly, premiums paid for your life insurance policy are usually not tax deductible (you cannot claim it on your individual tax assessment). The exception to this is when a life insurance policy is held by a superannuation fund, in which case the superannuation fund may be able to claim a tax deduction on your behalf. Many funds may even give you the percentage discount upfront.
Payout: whether or not the actual payout is taxed or not depends on several criteria, including how the benefit is paid, and whether it is to a tax dependant/non-dependant, or to the deceased estate’s trustee.
It is worth noting that your payout may be delayed as the benefit is paid to your super fund, who then pays your beneficiary(s). Death benefits paid out to anyone who isn’t a dependant may be taxed.
If you take out life insurance as a business owner and are seeking cover for revenue purposes, benefits paid are normally considered a form of income and will be taxed accordingly. However, should you decide to take out life insurance to cover your business’s capital, such as settling debts in the event of death, the benefit will generally not be subject to income tax.
You need to consider a few factors when searching for a policy that suits your needs. First and foremost, the ‘best’ life insurance policy may not necessarily be the one that’s cheapest, but rather the policy that includes the features that offer you the best protection.
Being mindful not to underinsure yourself is equally important. Taking out an appropriate amount of insurance that can cover the likely costs if the unfortunate were to happen – such as death, terminal illness, or permanent disablement – should be your primary concern.
Ensuring your family has sufficient finances to meet ongoing costs like mortgage repayments and day-to-day living expenses should be a significant factor when choosing a policy.
Finally, compare various products to ensure you’re getting the best features in the type of life insurance policy you seek. Comparethemarket.com.au allows you to compare a range of policies, so you’re in control when weighing up your options. This can give you the confidence to select the right life insurance product for you.
