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Life Insurance: Fact vs Fiction

There’s a fair bit of misinformation when it comes to life insurance – so here’s some general facts to think about when deciding if you’d like to get protected.

Life Insurance is Expensive

Not necessarily! Policies and premiums vary based on a variety of factors such as age, health and lifestyle. It can be less than $1 per day for a non-smoking 30-year-old to have comprehensive cover.

Life Insurance is for Older People

With life insurance being assessed based on age, health and lifestyle it makes sense to get covered while you’re young and healthy. Many people make the mistake of not applying until they’re older, however many claims are made by people as young as 40, so it’s good to have something in place to be safe.

Single People Won’t Need It.

Even if you don’t have any partners or dependants, if you were to pass away there may still be debts to pay and funeral expenses for your family to cover. If you don’t have any debts, dependants or children to consider, life insurance should be affordable as you may decide you don’t need a high level of cover.

Superannuation Fund Insurance is Enough

The life insurance provided by superannuation funds may not be enough to cover your needs. Studies have shown that super’s median default cover only meets about half the needs of a child-free household, and only about 25% for families with one child.

Only Breadwinners need Life Insurance

It’s significantly important for a family’s main income-earner to have insurances to protect their family, however, it’s also important to take out policies for the primary caregiver. Stay at home parents provide a key role that may need to be replaced if they are unable to fulfil it. The breadwinner may have to reduce in work hours to assist at home, or the costs of cleaning, childcare, home maintenance and housekeeping can add up so seriously think about including caregivers in insurances.

Less Questions = Quicker & Better Cover

When looking into life insurance it’s important to do your homework – always read the Product Disclosure Statement (PDS) and other documents from your insurer to make sure you know what you are and aren’t covered for. Many directly available covers don’t include a variety of health questions, and often these have a higher number of/more broad preexisting condition clauses that can cause claims to be delayed or denied. It can be easier to buy cover that’s quick and/or cheap, but that doesn’t mean it’s the best cover for your personal situation.

Health Disqualifies

You need to disclose all health conditions, however, this doesn’t mean that you won’t be eligible for cover. Premiums may be higher to accommodate for increased risk level, or covers may have specific exclusions relating to your condition. There are some conditions where specific cover may not be offered, but it’s important to still look at your options and if you’re taking positive steps to manage your condition, you might not be at a disadvantage.

Life Insurance is Set and Forget

You should keep on top of your cover and if it’s appropriate, adjust it for major life-events. Marriage, children, increasing mortgage – you could need higher cover or more insurance to ensure you’re adequately protecting yourself from being underinsured as your life circumstances change.


We have experienced and professional financial advisers who can help you review your financial situation and current circumstances to decide what level of cover works best for you. We’ll do the research for you and recommend policies that best suit your needs, plus we can help explain the entire process so you have a clear understanding of what your cover is. Give us a call if you’d like to find out more.

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