Income Protection Insurance - January 8th
Canstar compares life insurance policies to help you find the right one for you. In this article, we consider the top life insurance and income protection policies on the Canstar database.
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Life insurance could provide a lump sum payment to your beneficiaries upon your death, or upon your diagnosis with a terminal illness that is expected to end in death within 12 months. It could help protect your family financially should you pass away.
When weighing up if you need it, you could consider the following questions:
Canstar’s Direct Life Insurance Star Ratings and Award research uses a sophisticated and unique ratings methodology that compares both cost and features across products on our database. Canstar’s Star Ratings represent a shortlist of products, enabling consumers to narrow their search to products that have been assessed and ranked.
If you’re ready to consider your needs, compare with Canstar.
If you’re shopping around for cover, you might be tempted to go with a cheap life insurance policy to keep your costs down. It’s worth bearing in mind that the policy’s level of cover can also have a big impact on the value you get overall. For example, a cheap life insurance policy might offer a lower payout amount in the event of a claim or could exclude claims based on certain risks that may be relevant to your profession or hobbies. If you’re considering a cheap life insurance policy, it’s also worth bearing in mind that aspects of your lifestyle, such as whether you smoke, can have an impact on what you pay. Ultimately, it may be worth choosing a policy that offers a level of cover that’s suitable for your and your family’s needs and also offers value for money, rather than limiting your search to cheap life insurance options.
As Canstar’s Editor-in-Chief, Nina heads up a team of talented SEO experts and journalists committed to helping empower consumers to take greater control of their finances. Previously Nina founded her own agency where she provided content and communications support to clients around Australia for eight years. She also spent four years as the PR Manager for American Express Australia, and has worked at a Brisbane communications agency where she supported dozens of clients, including Sunsuper and Suncorp.
Nina has ghostwritten dozens of opinion pieces for publications including The Australian and has been interviewed on finance topics by the Herald Sun and the Sydney Morning Herald. When she’s not dreaming up ways to put a fresh spin on finance, she’s taking her own advice by trying to pay her house off as quickly as possible and raising two money-savvy kids.
Nina has a Bachelor of Journalism and a Bachelor of Arts with a double major in English Literature from the University of Queensland. She’s also an experienced presenter, and has hosted numerous events and YouTube series.
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→ Looking to find a better deal? Compare car insurance, car loans, health insurance, credit cards, as well as home loans, with Canstar.
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Consumers interested in finding out more about this type of cover can use Canstar to compare policies and narrow their search before seeking quotes from the providers. As premiums for policies will vary depending on your personal circumstances and the extent of cover you are after, the most effective way to get an accurate quote is often directly through the provider, either through an online quote form or by contacting them.
The premium quote you receive will be dependent on a number of factors that can include your age, gender, medical history, occupation and whether or not you smoke. Typically, a quote for a policy for a male will be higher than for a female, and smokers pay more than non-smokers.
There are a number of options available in Australia, and you may choose to bundle a number of products together, such as total and permanent disability (TPD), trauma or life insurance. If you’re considering taking out more than one product, it could be a good idea to ask the provider for a quote for a bundle to see if there are potential savings on offer.
There are a variety of products available from a wide range of providers, and so it can help save time to have an understanding of what type of cover you require before you seek quotes. This could include the type of product or products you would like, as well as the financial amount you would like to be covered for. If you are unsure about what cover you may require, it could be a good idea to seek financial advice from a professional before requesting a quote from providers.
The total cost of the premium is not the only factor to take into consideration when comparing policies and quotes, as products can vary greatly in terms of the coverage and service offered. Aside from the quote, you may also want to take into consideration any exclusions, the events that are covered, the total amount that would be paid out in the event of a claim, features and benefits (such as counselling or financial advice services) and waiting periods.
Canstar considers the cost as well as features when determining the results of its Star Ratings. The results are presented in a 5-Star format, with products receiving a 5-Star Rating representing outstanding value. This can help consumers narrow their search to products that have been assessed and rated before they seek quotes from providers.
Below are some providers we rate or view more here:
Below are some providers, you can view more here:
Life insurance provides a lump sum payment to your beneficiaries when you die or are diagnosed with a terminal illness that will result in death within 12 months. It’s designed to help loved ones to cope financially when someone passes away. In addition to offering policies with varying levels of term life cover (also known as death cover), many life insurers also offer income protection cover, trauma cover (for critical illnesses and injuries), and total and permanent disability cover (TPD).
There typically are four different types of cover on offer: (1) term cover, which is also called death cover; (2) trauma cover, which provides a lump sum payment if you suffer a critical illness or injury; (3) total and permanent disability (TPD) cover, which provides a lump sum payment if you become disabled and can no longer work; and (4) income protection, which provides a monthly payment of up to 75% of your regular income, up to a maximum amount, for a period of time you are unable to work. TPD and trauma cover are both often bundled with term cover, either by default or as an optional extra. Income protection cover is generally sold separately to life cover, but some providers offer discounts to customers who take out multiple policies.
You may want to seek professional financial advice to help you decide whether to purchase a policy. For example, many of us have life insurance through superannuation, so you may want to work out whether this is sufficient for your needs.
If you are considering buying a policy, ask yourself questions such as: If you died, would your family be able to maintain its current standard of living and achieve the future goals you had set? If you were permanently disabled, how would your family pay the bills? If you don’t have a family, who would look after you and would you be able to afford the care? How long could you continue to pay your bills without income? If you suffered a significant injury, could you afford home modifications? How would you pay for the cost of any long-term rehabilitation?
Based on your responses, you may benefit from having a level of cover in place. You can estimate how much cover you may need using Canstar’s Life Insurance Needs Calculator.
Yes, in Australia you can switch policies and even hold multiple policies. It may be a good idea to review your cover regularly, especially if your income or personal circumstances change.
For example, if you get married, have a baby, take out a home loan or start a business, you may decide you need more or different cover. You may decide to reduce your cover if your expenses and debt decrease. If your current policy no longer provides good value, you may consider comparing policies and viewing the most recent winners of Canstar’s direct life insurance and direct income protection Star Ratings and Awards.
Before switching, consider any important cover or benefits included with your existing policy that you might lose, as well as any waiting periods or exclusions that would apply to the new policy.
How much cover you need, if any, depends on your personal situation. Canstar’s Life Insurance Needs Calculator provides an estimate of how much cover you and your family may require if you die, suffer a trauma, or become totally and permanently disabled (TPD) or unable to work. However, you may like to seek financial advice from a qualified advisor before making a decision. If you decide you do need cover, you can compare life insurance and income protection policies based on your requirements, and view Canstar’s most recent Direct Life Insurance Star Ratings and Awards and Direct Income Protection Star Ratings and Award.
Advised life insurance is cover that can only be obtained through a specialised financial adviser who may support you in finding and applying for a policy for your specific requirements. Advisers will usually ask questions about topics such as your budget and personal, living and family situation. They may also help you shop around among a range of providers. Bear in mind that some financial advisers receive a commission for selling certain products, or in some cases are employed by the insurer or work in a different part of the same overall company. One alternative to this is speaking to an independent financial adviser who is not allowed to receive commissions for recommending products to clients.
Some of the potential pros of direct life insurance include the ability to choose cover that specifically meets your needs, having the option to pay in stepped (increase over time) or level (remain the same over time) premiums and cover generally continuing as long as you pay the premiums. This is unlike life insurance through super, which usually ends at age 70, according to Moneysmart. There are also possible cons of this type of cover, which include that premiums could be more expensive than what you might pay for cover through super; you may need to undergo a medical or health check to get the cover; and some pre-existing conditions may not be covered, depending on the policy.
