A life insurance policy can pay a lump sum should you, or someone in your family (who’s listed on the policy), become sick, permanently disabled or diagnosed with a critical illness.
Here are the different types of life insurance policies available:
Types of life insurance
- Term life insurance: In the event of your death, or the diagnosis of a terminal illness, life insurance pays a lump sum to your beneficiaries. A life insurance policy can insure other members of your family and even business partners.
- Total and Permanent Disability insurance: Commonly known as TPD insurance, this type of policy provides a lump sum if you’re unable to earn a living due to an accident that causes a total and permanent disability.
- Trauma insurance: Also known as critical illness cover, trauma insurance provides a payout if you are injured or diagnosed with certain illnesses, such as cancer and heart disease.
Plus, income protection pays a regular sum if you’re unable to work due to illness or injury for a period, while funeral insurance pays a one-off cash benefit to cover the expenses of a funeral (but nothing more).
Other elements that can affect your life insurance policy
Depending on your insurer, your policy and the type of life insurance product you purchase, you might have a few features to choose from which could affect your cover and premiums:
- Stepped premiums versus level premiums. You might be able to choose between stepped premiums or level premiums, which affect how your premiums are calculated, as well as how much you’ll pay for your cover over the years.
- Linked and stand-alone cover. If you purchase multiple life insurance products, you can bundle it all together with a linked policy or keep them as multiple stand-alone policies.
- Own occupation or any occupation. Typically, TPD insurance allows you to choose between an own occupation or any occupation definition for how you’re covered. One allows you to claim if you’re unable to work in your usual occupation, the other if you’re unable to work in any field.
- Policy riders. If you want to add optional cover such as cover for a child, home bed care and accidental death cover, you can purchase a policy riders add-on – at an additional cost.
Comparing life insurance policies? We’re ready to help you
If you’re thinking about taking out life cover, then comparing policies is a great first step. We compare a number of policies from our partners and in minutes you’ll be able to weigh up results through our free life insurance comparison service.
Want to purchase a policy from our partners? We’ll put you in touch with a specialist agent who can assist you through the rest of the process (this doesn’t cost you extra). Simples!
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.