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Types Of Life Insurance


Most people think that there is only 1 type of life insurance available in Australia and this is partially true. Earlier on there were three additional types of insurance plans offered to buyers that were whole life cover, endowments and universal life cover however these 3 policies are not offered any more.

Term life cover is the only type of insurance currently available in Australia and in this type of insurance plan, the buyer is insured only for a fixed period of time. People have the option to opt for both short term covers and long term covers when they opt for term life insurance. Term insurance protects people up till they are 99 years, if they have selected a long tenure. The main benefit of opting for a long term policy is that the person doesn’t have to worry about renewing his policy periodically and he can live worry free. Since this type of policy does not accumulate cash value, it does not have any surrender value.

In the case of a term policy, the policy holder can select up to 5 beneficiaries who will receive an amount after the policy holder passes away. The policy holder has the right to change this list at any time while the policy is active. Buyers should note that if the policy expires before the demise of the policy holder then the family will not receive any payments from the insurance company. In addition, life covers only protect people when they die due a natural death or due to an accident.

While opting for term life cover plans, the buyer has to keep a few things in mind such as the number of years he wants to be insured, the amount of premium he wants to pay and the face amount of the policy. The face amount is a term used for the amount the policy holder is insured for. It is important to note that when premiums are not paid on time, the policy becomes inactive or void and the person insured cannot enjoy the benefits offered.

Life insurance policies are considered to be very important since these policies ensure that the policy holder’s family does not suffer when the policy holder passes away. Although most people concentrate mainly on the amount of premium they have to pay while buying these policies, it is important to remember that other factors such as benefits should be taken into consideration while opting for life cover plans.

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