Life Insurance Buyers Guide – Understanding Your Options

Life Insurance Buyers Guide

Life insurance is something worth considering. Contrary to common belief, it is not a reserve of the old or even married couples.

There are instances when you have financial dependents that are not your children or spouse. You can take out insurance to cover aging parents or siblings. Hundreds of families get stranded financially when they are faced with sudden illness, injury or even death. This in essence is why life products are created – to cushion families against such uncertainties.

There are different insurance products in the market today. The Australian life insurance market has seen many new entrants and customers have a wide range of products to choose from. Click here to know more info.

Importance of life insurance

Life insurance is designed to provide support to those dependent on you. It pays out a lump sum benefit in the event that the life insurance policy holder dies or is diagnosed with an illness that is terminal. The proceeds received in a life cover can be used to cater for: daily living expenses, mortgage or rent payments, short term debts, personal loans, car loans, replacement of loss of income, medical expenses, burial costs, legal fees and any outstanding tax.

Policy options

The insurance life insurance market is somewhat different from other countries. The main distinguishing factor is that whole or universal life insurance is not offered. However, there is a wide range of insurance products to choose from. Among them:

Critical illness or Trauma Insurance

Under this cover, you get a lump sum payment if you’re diagnosed with an illness such as heart attack, cancer or stroke. This illness needs to be specified in the cover. The list differs depending on the insurance provider.

Total and Permanent Disability insurance

This cover also pays a lump sum in the event that the insured is diagnosed with illness or suffers an injury that disables him or her permanently. This means that he or she cannot go back to work and in some instances, he or she may be unable to perform any other type of work.

Income Protection Insurance

This will provide a regular stream of income if the insured is unable to work for a while due to an illness or injury. In most cases, insurance providers will pay up to 75 percent of the policy holder’s earnings. This means that you can concentrate on getting better without having to worry about your bills and financial obligations. Read: How to find the actual house price

Business Expense Insurance

This is meant for businesses and provides an ongoing benefit to cover for running costs in the event that you are not able to work due to an injury or sudden illness. The payment can be used to cover wages, rent, power bills and other business expenses.

Partner Insurance or key person

This cover also provides lump sum payment to cover any losses incurred if a key person in the business suffers an injury, dies, or is ill. It is also taken out to ensure that if a business partner dies, his or her estate receives a share of his contribution towards the business. The above life insurance buyers guide should come in handy when selecting the right insurance products for you.