Term Life insurance

Term Life insurance is the most straight forward type of personal insurance – it pays in the event of death. These policies are renewable each year and as long as you continue to pay the premiums, will provide a lump sum death benefit to your listed beneficiaries in the event of your death.

The main decision to be made when finding the right Term Life insurance policy is the amount of cover that you require, then we go to the major insurers in the market place and find the most cost effective policy for you. Then all there is to do is decide who will own your policy (see article ‘Ownership of your policy’), who will receive the benefit in the event of a claim (see article ‘Who should the money go to?’) and what types of premium structure you require (see article ‘Stepped vs Level Premiums’.

As long as your Term Life insurance policy covers you in the event of accident and illness (some cheaper policies only pay in the event of accident!!!) the decision should be rather straight forward.

The ‘Term’ which is suggested in the title is usually up to the age of 99, however you can choose to stop paying your premiums at any stage and therefore forfeit any future benefits in the event of your death. Once your Term Life insurance policy is in force, as long as you keep paying your premiums, you will not need to provide any ongoing medical to the insurance company - You will be covered against any medical conditions that arise after this point. Therefore it is of utmost importance that you continue to hold your policy once you have had any serious medical conditions as you may not be offered full cover with any other insurance companies after this point.

There is no investment value within Term Life insurance policies and therefore if you stop paying your premiums you will not receive any investment return or refund from the insurer. Over the term of your policy you can chose to reduce your benefit amount usually without any difficulty, however if you would like to increase your benefit amount, you may need to provide an update of your financial and medical situation to the insurance company.

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After having had my income protection, with a company based abroad, for the last 15yrs I recently decided to sort it here in Australia.(Now based here so it makes sense.)
Needless to say the thought of trying to get a similar product for a good price was a concern....

Dr S.T (BDSc)
Dentist
Newman, WA.