Life Insurance FAQs

There are a lot of unknowns in life, and the COVID-19 pandemic has shown us that. But life insurance can help take away some of the financial stress if something bad happens to you or your family.

Life insurance is a product that is meant to give you and your loved ones a lump sum of money if you get a terminal illness or die. It’s also called death cover or term life insurance. Other types of life insurance, like income protection, trauma, and total and permanent disability (TPD), are also covered by life insurance, but they cover different things.

Thankfully Billy Explores is here to help you with this handy quick reference guide to a range of FAQs about what to think about as you compare life cover and find the best life insurance policies in Australia for your needs.


Why Do I Need Life Insurance?

We never know what will happen in the future, and if you are the main source of income for your family, it can be comforting to know that if you die, your family will be taken care of if you have life insurance. We don’t always have enough money saved to pay for important things like a mortgage or the kids’ school fees for months or even years. Having a life insurance policy gives you peace of mind in these situations. Most people name their spouses or children as the beneficiaries of their life insurance policy, but you can also choose your parents, business partners, siblings, or your estate.

Do I Need Life Insurance?

If you have people who depend on your income and salary (ie dependents), a mortgage to pay off, or debts to pay off, a life insurance policy can be a good way to protect your finances. You might think you’re too young for life insurance or that it’s too expensive, but when you think about what it would really cost you not to have it, you might decide that it’s something you don’t want to go without.

How Much Life Insurance Do I Need?

This depends on your own situation and where you are in your life. As a general rule, you should have enough insurance to make sure your loved ones can keep living the same way if you die. When figuring out the amount, you should take into account what you already have, like your super, savings, and assets like shares. Then, figure out how much money your family needs to pay for the mortgage or other loans, school fees, and everyday living costs.

There is a lot of research that shows there is a big problem with people not having enough life insurance. In many cases, a person’s life cover was not enough to meet their family’s basic needs. Check out these handy guides:

What Is The Best Life Insurance In Australia in 2022?

The answer to what is the best life insurance in Australia in 2022, is the best life insurance policy for your needs. There are so many different life insurance policies and providers, all saying they have the best life insurance in Australia in 2022. However, it’s always best to compare life cover and see if you can the best value life insurance cover for your needs through Billy Explores.

How Much Life Cover Should I Take Out?

Most of the time, your insurer will decide how much coverage you can get. This will depend on things like your age, income, and job. Most policies have a minimum of $100,000, but some will cover you for as little as $50,000 and up to $1.5 million, depending on the provider.

To What Age Can I Take Out Life Insurance?

Most insurance companies let you sign up for coverage until you reach a certain age. This age is called the “maximum entry age,” and it is usually between 60 and 75. Each insurer has different age and coverage limits, so make sure you read the insurer’s Product Disclosure Statement (PDS) to see if you meet their requirements.

How Much Does Life Insurance Cost?

In Australia, the cost of life insurance depends on your age, your job, your health, whether or not you smoke, and how much coverage you want. Most of the time, men pay more than women for life insurance. One way to lower your premiums is to stop smoking. Also, if you no longer have children who depend on you, you may not need as much life insurance as you bought at first. If you think you’re paying too much, you might want to compare life cover through Billy Explores to see if you can find the best life insurance policy for your needs.

Is Life Insurance Through Super Tax Deductible?

There are two answers to the question is life insurance through super tax deductible. The answer is both yes and no. You can claim a tax deduction in your super for the cost of premiums you pay for insurance against the loss of your employment income but not against any other premiums.

Is Life Insurance Tax Deductible ATO?

As with the question of life insurance through super tax deductible, the Australian Tax Office (ATO) generally only allows tax deductions for premiums if the insurance cover relates to earning assessable income. This means premiums for a stand-alone life insurance policy are not tax deductible. Income protection insurance is one type of cover where tax deductions are allowed.

Does Life Insurance Pay For Suicidal Death In Australia

This isn’t a very nice question to ask, but it’s still important to know when comparing life insurance and asking the questions: Does life insurance in Australia pay for suicide deaths? It’s almost as important as figuring out what the best life insurance in Australia is! The short answer is that some types of life insurance do. Billy Explores has also written a long guide about this question, so if you want to know if life insurance pays for suicide deaths in Australia, click here.

Can You Have Multiple Life Insurance Policies In Australia

Following on from the tip about the super, it is worthwhile to ask the question if you can have multiple life insurance policies in Australia. The answer is yes you can. Billy has already created a great guide that covers this question – find out more about if you can have multiple life insurance policies in Australia here.

Can I Claim If I’m Diagnosed With A Terminal Illness?

Most life insurance policies cover terminal illness. If you have been diagnosed with a terminal illness and are not expected to live more than 12 to 24 months, you can get a payment early. Some insurers will pay out all of your life insurance, while others will only pay out a certain amount. To make a claim, you will need to send your insurer copies of the relevant medical and test reports. You still can compare life insurance even if you’ve been diagnosed.

Can I Get Life Insurance Without A Medical Exam?

Most insurers require you to answer general medical questions but if you want to apply for a high level of insurance, you may be asked to undergo a medical exam. If you don’t want to undergo an exam, you can still get life insurance at the amount you want but you may find your premiums will be higher. Generally, the more comprehensive the cover, the more information you will need to provide before an insurer determines whether to offer you cover and on what terms.

Are Life Insurance Payouts Taxable in Australia ATO?

Life insurance payouts are usually tax free if they go to your financial dependants. However, if your benefits are going to non-dependants, it’s best to seek advice from your tax adviser as tax may be payable in this situation.

Can I Get Life Insurance Cover As A Couple?

Yes, some insurers do allow you to have a joint or ‘multi-life’ policy. It’s usually taken out by spouses or partners, and allows for different amounts of cover for each partner. Generally, insurers will require you to nominate your partner or spouse as the beneficiary. 

How Do I Claim On A Life Insurance Policy After Death?

Once this happens the nominated beneficiary needs to contact the insurer and notify them of the death. The insurer will then send through the necessary forms for them to complete in order to receive the payout. If you haven’t nominated a beneficiary, your insurer will pay out the proceeds to your estate.

How Can I Compare Life Cover And Get The Best Life Insurance Policy In Australia?

It’s so easy to compare life cover through Billy Explores. All you have to do to find the best life insurance policy in Australia from our panel of providers that’s perfect for your needs is click here. You can save time and effort and explore a range of life insurance cover from our panel of life insurance providers.