Term life insurance
What is term life insurance?
Term life insurance, also known as death cover, is one of the more common types of life insurance in Australia. With a term life insurance policy, you can nominate beneficiaries who can receive a lump sum payment in the event of your death, or you can receive a lump sum if you have a terminal illness diagnosis.
This type of cover can give you peace of mind knowing that, with a successful life insurance claim, your loved ones will receive a lump sum death benefit they can use for any expenses they deem necessary. These could include funeral costs, education, shared debts (e.g. credit cards or a mortgage) or anything else.
How term life insurance works
How much does term life insurance cost?
The cost of life insurance cover can vary from person to person and will depend on several factors that may differ between funds and policies. However, here are a few common factors that could affect the cost of a term life insurance policy:
- Age
- Sex
- Medical history
- Sum insured (i.e. the amount you’ve chosen to be covered for.)
- Smoker status
- Health status (e.g. BMI)
- Hobbies and lifestyle.
For more information on your policy premiums, refer to the relevant Product Disclosure Statement (PDS). If you’re looking to save on your life insurance costs, check out our guide to reducing life insurance premiums.
Can you get term life insurance without a medical exam?
Depending on your life insurance company and the specific insurance you’re applying for, you may be required to undergo a medical exam as part of their underwriting process. Other insurers may only require a short questionnaire or have no medical underwriting at all.
How much life insurance do I need?
The right level of cover for you will depend on your personal circumstances. For example, you may want to consider any outstanding debts, whether you have a spouse with a stable income and the needs of any dependants.
If you’re still unsure on the right amount of cover for you, our free life insurance calculator can give you an idea of the benefit amount you may want.
Other types of life insurance
Alongside term life insurance, there are other types of cover offered by Australian life insurance companies that you might want to consider:
- Accidental death insurance. This type of cover is similar to term life insurance, except it only pays out if the cause of death is considered accidental.
- Total and permanent disability (TPD) insurance. TPD insurance pays out a lump sum benefit if you become permanently disabled and are unlikely to ever return to your usual or any other occupation you’re qualified for.
- Trauma insurance. You’re covered for a lump sum if you suffer from a serious injury or medical condition.
- Income protection. This type of cover pays a regular monthly benefit when you’re unable to work due to an injury or illness.
Meet our life insurance and income protection expert, Steven Spicer
As the Executive General Manager of Health, Life and Energy, Steven Spicer is a strong believer in the benefits of private cover and knows just how valuable the peace of mind that comes with cover can be. He is passionate about demystifying the health insurance industry and advocates for the benefits of comparison when it comes to saving money on your premiums.