Life Insurance FAQs

If you are a first time life insurance buyer then chances are that you have many questions regarding life insurance plans; such as where to purchase them, how to compare plans, what are the benefits of these plans, what are the limitations of these plans and how does your job impact your life insurance policy. This article will aim to answer all these questions and a few more.

 Where Can I Purchase Life Insurance Plans?

Life covers can be purchased online. These plans can be purchased either directly from insurers’ websites or insurance agents’ websites. Purchasing a plan directly from an insurer is an ideal solution for those people who know which plan they want and are ready to pay the quoted premiums.

Purchasing a plan from an insurance agent is an ideal for those people who want to compare plans before purchasing, get good deals and get an affordable but good plan in their budget.

 How Do I Compare Life Covers?

The best way to compare life covers is to choose an insurance agent’s website or an insurance comparison website, choose 3 or more insurance plans and compare features such as the benefit period, waiting period, term, conditions, restrictions, insured amount, cover level, additional benefits and exclusions of the plan.

Comparing plans is a lot easier on insurance comparison websites because of the easy to use and free comparison tools available on these sites. While comparing plans you may also want to compare the claims process of the selected plans, the claims payouts for that year of the selected insurers and the premium payment plans offered by the selected insurers.

 What are the Benefits of Life Insurance Plans?

  • Term life covers not only offer peace of mind to the policy holder when he is alive but also offer financial support to the grieving family of the policy holder when he passes away. These plans ensure that policy holders can live peacefully knowing that the selected insurer will give his family the pre-decided compensation payment once a successful claim is filed.
  • Income insurance plans offer peace of mind to the policy holder and his family since the policy holder knows that when he is ill or injured and unable to work for a few days, weeks or months due to this, the insurer will support him financially by providing monthly payouts.Income insurance plans can pay you a maximum of 75% of your annual pre-tax income towards monthly payouts. Additional perks that are usually provided with income covers include but are not limited to, the 24 hour worldwide cover, the indemnity benefit, the guaranteed renewability benefit, the day one claim benefit or the day one accident benefit, the transplant surgery benefit, the cosmetic surgery benefit and the death benefit.

 What are the Limitations of Life Covers?

Term life covers do not offer the compensation payout to the beneficiaries of the estate in two scenarios. The first is; the policy holder suicides to get the compensation payout, the second is, the policy holder doesn’t disclose health related information to the insurer or any other important information that can affect the premiums or policy in any way. Compensation may not be given for lapsed policies, incomplete claims, claims that are not supported with documents and other relevant information.

Income insurance plans do not offer compensation payments when the policy holder loses a job and is unemployed. These plans offer compensation payouts when the policy holder is unable to work temporarily due to health conditions. It should be noted that for certain professionals such as doctors, income covers provide a lump sum payment when they have to quit their profession due to contracting HIV, Hepatitis B or C from a patient while at work. The final compensation rules will depend on the definitions of the contract.

 How Does my Job Impact my Life Insurance Policy?

Your job plays an important role in determining the premiums you pay and the benefits you get. Updating your policy helps insurers understand your needs better and a change in your job profile can affect your policy in various ways. For instance, a change in your job profile may mean additional benefits, lower premiums or higher premiums. Failure to keep your insurer apprised can lead to a lapsed policy and rejected claims.

 What is the Difference Between Term Life Covers and Income Insurance ?

  • Term life covers are offered to Australian buyers who want to protect their families for a fixed number of years. These plans pay the pre-decided lump sum payout when the insured person dies due to an accident, illness or natural causes such as old age. The lump sum payout can be used by the family of the policy holder to pay outstanding bills, repay loans, mortgages or other debts or use the money for other purposes.
  • Income covers are offered to Australian buyers who want to protect both themselves and their families. These plans are also offered for a fixed number of years and have a fixed benefit period. The benefit period is the period of time in which the buyer can enjoy one or all of the benefits given by the insurer. Income covers pay a monthly compensation payment and not a lump sum payment. This monthly compensation payment can be used by the policy holder to pay bills, repay monthly mortgages or loans and run his household. This monthly compensation payment can also be used to buy groceries or pay the children’s school fees. This money can also be saved up by the policy holder for a rainy ray.

 Why Purchase Add on Plans?

Add on plans such as funeral insurance plans, trauma insurance plans and Total permanent disability covers are often sold along with life insurance covers. Purchasing an add on plan is the best way to ensure that you are protected financially when life surprises you with an unpleasant situation that you are otherwise not prepared for financially. Purchasing add on covers along with either term life covers or income insurance covers can help you save money and get good deals or offers.



  Income Protection Life Insurance


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