Have you ever wondered how your family would cope if something were to happen to you? For example, would they be able to manage the mortgage repayments or other household bills, and would their quality of life remain the same if you could no longer provide for them? These are the kinds of concerns that usually motivate someone to take out life insurance. So how do you decide if life insurance is right for you?
Firstly, how does it work?
Life insurance is a type of cover that can pay out a sum of money to your family (or people you’ve chosen) should you die. Some policies also offer an optional benefit if you, or your child, are diagnosed with a critical illness or injury, or you become permanently disabled. The amount of money paid is dictated by the specific policy you take out, and some policies have exclusions for certain causes of death, such as suicide.
Who can receive the payout?
As a general rule, benefit payments will be made out to your legal personal representative, or the beneficiaries you’ve nominated on your policy. Benefits to children are usually paid to their legal guardian or a trustee until they turn 18. In some cases, such as with terminal illness, children’s insurance, trauma cover, or being permanently unable to work, the benefit may be made directly to you.
When should you get it?
A good time to consider life insurance is before major life changes that mean the wellbeing of people you care about is directly affected by what happens to you. These include:
- Becoming part of a couple
The loss of a partner’s income can have a big impact on the standard of living of the person left behind. A lump sum payout can help ease the transition from a double to single income.
- Buying a home
A mortgage shared between two people can become a significant financial burden when the repayments fall to one person. An insurance payout can help towards home repayments and other debts.
- Having children
If you have dependants that rely on you, life insurance can help protect their financial future and help maintain their lifestyle.
- Starting a business
Leaving behind high-risk ventures can place your loved ones under significant financial stress. The money from life insurance can help towards servicing the business or tying up loose ends.
What’s the process for getting life insurance?
Usually, you’ll need to fill out a medical questionnaire or answer questions over the phone. You might also need a medical check-up and blood tests. However, if you are aged between 18 and 45 years, Medibank has a simplified product called Starter Life Insurance that you can apply for online in 10 minutes. You’ll only need to answer one question about your health, and you can choose cover from $50,000 to $250,000. And if you provide your height and weight details, you may be eligible for a discount on the premium.
If you’re looking for a more comprehensive level of cover—with higher payout amounts or added optional benefits —you can get a quote online for our standard life insurance product, Medibank Life Insurance, or call 1300 722 568 to apply over the phone.
And if you’re a Medibank member, you’ll get a 10% discount on your premiums for the life of your policy.
Important things you should know: The information contained on this page is of a general nature only and has been provided without taking into account your specific objectives, financial situation or needs. You should consider the appropriateness of the information in light of your particular needs and circumstances. You should consider the Product Disclosure Statement for full Terms & Conditions (available at medibank.com.au/life). Medibank life insurance products are issued by the insurer, Swiss Re Life & Health Australia Limited ABN 74 000 218 306; Australian Financial Services Licence No. (AFSL) 324908, Level 36, Tower Two, International Towers Sydney, 200 Barangaroo Avenue, Sydney NSW 2000. Medibank life insurance products are distributed by Greenstone Financial Services Pty Ltd (GFS) ABN 53 128 692 884; AFSL 343079, 58 Norwest Boulevard, Bella Vista NSW 2153 and promoted by its Authorised Representative Medibank Private Limited ABN 47 080 890 259; Authorised Representative No. 286089, 720 Bourke Street, Docklands VIC 3008. Medibank Private Limited is also authorised by GFS to distribute Medibank Starter Life Insurance.