People generally don’t like to ruminate on their own mortality or think about what their loved ones would do without them, so it’s understandable if you’ve avoided getting a life insurance policy up to this point. If you have people who depend on you and your income, however, then it’s imperative that you go ahead and get familiar with the life insurance industry.

Life insurance companies offer a few different types of coverage to Australians based on their individual needs and desired levels of coverage. Insurers may offer a lump sum payment to beneficiaries, or payments may be given out via installments.

Factors You Need to Consider


There are plenty of great options to compare Australian life insurance quotes online, but it can be difficult to know which policy (or policies) you need. You’ll need to consider a variety of factors as you compare quotes and determine the policy that most fits your needs. The type of coverage is naturally important, but so is the level of cover you’ll receive in exchange for your premiums.

Speaking of premiums, you’ll need to determine if you want to keep a level premium for the duration of the policy or if you’re willing to risk varying premiums for more coverage. Of course, the insurance industry doesn’t make money by actually paying out claims, so you’ll need to carefully study and exclusions your policy has as well. Typical exclusions include denying pay out if your death was a suicide or if you died committing a crime.

It’s also important to consider your medical history and how it might impact your eligibility. You’ll need to submit your medical history during the application process, and it’s possible that you’ll need to undertake a medical exam, the test results of which could affect your premiums or coverage levels.

Up until 2024, life insurers are prohibited from using genetic test results as part of the application process for certain coverage levels, but a genetic test may be something you’ll need to submit to in the future. Here is a simple breakdown of the types of life insurance to help you determine what kind of coverage best fits your needs.

Life Cover

This is the basic type of coverage that provides a lump sum death benefit to your beneficiaries upon your passing. You can choose the coverage amount you think is appropriate to cover their needs. For example, you may only have enough coverage to wipe out existing debts and help with final expenses, or you could take out more coverage to provide enough for your family to live on for years to come.

Income Protection Insurance


This type of insurance provides you with a stream of income in case you’re unable to work due to sickness or injury. This coverage can provide up to 75 percent of your income prior to your injury or illness, and benefits are typically paid each month. You may want to consider this type of coverage if you have ongoing debts to ensure that they don’t get worse.

Total and Permanent Disability

TPD coverage pays a lump sum in the event that a serious illness, such as ovarian cancer, or a severe injury prevents you from ever being able to work. It’s important to note that in order to fully qualify for TPD insurance, your medical condition must be considered stable, meaning that you’re out of curative options and doctors don’t think you’ll improve. You may purchase this type of insurance as a standalone policy, or you may have it added to your life cover.

Trauma Insurance


These plans pay a lump sum while you recover from a medical condition that you are expected to come back from. Examples could include strokes, heart attacks, or other serious (but not chronic) medical conditions. These plans will cover any medical treatments you need that aren’t covered by Medicare or your private health insurance.

Life insurance is a complex topic to take in and to ensure you make the right choice, you’ll likely want to discuss options in depth with your family and financial advisor.