Life can be unpredictable no matter your age; nobody can foresee the future!
A life insurance policy can protect your loved ones from the burden of picking up sudden expenses should the worst happen to you, like death or terminal illness. That is why acquiring a suitable level of cover as a senior can be important.
Even if you’ve built up a nest egg over the years, life insurance gives you peace of mind, knowing your family won’t have to reach into your hard-earned savings to cover any unexpected costs. Many seniors who have reached (or are approaching) retirement seek to safeguard their family’s financial stability through a life insurance policy. We’ll take you through everything you need to know about life insurance for senior Australians.
Life insurance is available to most senior Australian citizens (typically between the ages of 60 and 75), provided they don’t have any serious pre-existing conditions. In some cases, you may be required to take a medical exam or have blood tests during your application, but this is relatively common even when purchasing cover earlier in life. The cost of your premiums depends on various circumstances, such as your current health status, medical history and how much life insurance cover you need.
Both permanent residents and those who are living in Australia without permanent residency may be eligible for life cover; however, there may be different application and procedural assessments, which are dictated by each insurer. Therefore, it’s imperative to check with your life insurer if you’re considering taking out cover. Generally, seniors who are not Australian residents applying for life insurance need to meet the following requirements:
For seniors, life insurance costs can depend on many factors, such as the life insurance provider and the type of policy you choose. Generally, life insurance premiums tend to get more expensive as you age, but this is not always the case. For example, someone who lives a dangerous or unhealthy lifestyle could end up paying more for their policy than someone who is older.
The underwriting process differs between life insurance companies, so it might be a good idea to compare quotes from multiple insurers to find the best life insurance policy for you.
There are several different types of life insurance available. Each type of cover varies in its purpose, conditions, payout type and minimum and maximum age limits. Four of the most common life insurance options are:
A term life insurance policy makes a lump sum payment to your beneficiary in the event of your death. It’s suitable for people wanting to ensure their family is provided for after their death or to cover their medical bills if diagnosed with a terminal illness. A term life insurance policy only covers you for a set period of time (e.g. 30 years or until you turn 80). If you took out life insurance before it was discontinued in 1992, you might be on a whole life insurance policy instead, which covers you for your whole life and accrues a cash value that can often be withdrawn during your lifetime. You can no longer take out a whole life insurance policy, so keep in mind that if you’re switching insurance, you’ll be moving to a different type of cover.
TPD pays you a lump sum of money if you’re permanently disabled, which can go towards expenses like treatment and rehabilitation or to compensate for lost income. It can be taken out with your life insurance policy or as a separate policy. Some TPD insurance products will also pay out a death benefit if you die before claiming on the policy.
Also known as critical illness cover, trauma insurance pays a lump sum if you’re diagnosed with a serious medical condition. There are many medical conditions that fit the criteria of a trauma event, including cancer, circulatory diseases and nervous system diseases. Each policy will specify exactly which conditions are covered and the level of severity that needs to be met.
Sometimes called burial insurance or final expense insurance, this type of insurance pays a lump sum that can go towards funeral expenses in the unfortunate event that you pass away. Generally, you don’t require a medical exam to take out this type of insurance, although it usually comes with a lower coverage amount.
Reaching the half century is a significant milestone in anybody’s life. It’s also a time to think wisely about your savings plans, retirement goals and family’s financial future. You may also want to consider life insurance during this period to ensure your family’s debts are covered should something happen to you.
Australians over 65 years of age have so much to look forward to, like retirement, travel and relaxing. Unfortunately, it’s not all smooth sailing, and over time your health will likely become a big factor in determining where you choose to allocate your resources.
When you’ve matured beyond the age of 70, it becomes time (if you haven’t already) to seriously consider your health status and what you’ll be leaving behind for your family. If you’re considering life insurance, please take the time to read your insurance provider’s Product Disclosure Statement (PDS). Features and benefits, terms and conditions and maximum entry age are all factors you’ll want to consider. If you’re unsure of any clauses in your product, it might be wise to speak to a life insurance expert to discuss your options.
While there is no simple way to answer this question, it’s always wise to consider your circumstances without forgetting about your family’s future and livelihood. If your family’s finances are in order and you’ve taken your household debt into consideration, you may only require a low level of life insurance cover, if you need it at all.
You may want to take out life insurance after retirement for a variety of reasons:
Another component of life insurance you need to be aware of is your policy’s expiry age. These age limits vary between insurers and policies, but are generally:
These expiry ages are a guide only. It’s important to always read your PDS to find out at what age your cover may become void or change to a different type of cover.
Lana Hambilton strongly believes all healthy senior Australians should consider life insurance. Lana knows all too well how life insurance can comfort and protect your family should you become terminally ill, permanently disabled or pass away.
Lana has 15 years’ experience in the health insurance and insurance comparison industries. She’s also a Board Member of the Private Health Insurance Intermediaries Association.
We understand that everyone’s circumstances are different, so finding the right life cover for you can be a complicated process, especially as a senior. For that reason, we want to help you find a policy that works for you by offering an easy-to-use online life insurance comparison tool. In just a few minutes, you’ll be able to select a range of features that matter the most to you and compare life insurance quotes from our panel of trusted life insurance providers.
