WHAT IS LIFE INSURANCE AND HOW DOES IT WORK?
Life Insurance, also known as Life Cover or Life Assurance, is a way to help protect your loved ones financially if you were to die during the length (term) of your policy.
You choose the amount of cover you need and how long you need it for, and you can pay your premiums monthly or annually. In return, your loved ones have the reassurance of knowing that if you died while covered by the policy, they could receive a cash/lump sum pay out or income if a valid claim is made.
They could use this to help with covering crucial costs such as mortgage payments, household bills, child-care costs, etc.
HOW MUCH DOES IT COST?
The premium (cost) will vary depending on the amount of cover you want, the length (term) of the policy, your age, your health, your job, and maybe even your hobbies.
The cost of Life Insurance tends to be cheaper the earlier in life you take out a policy.
It's important to choose a premium that you can afford now and in the future. The policy you pay for is there to protect your loved ones - not anyone else's - so it's important you have a policy that will suit your needs.
You can choose whether to pay for your Life Insurance monthly or annually, and your premiums won’t go up unless you alter your policy, so you’ll always know how much you’re paying.
DOES A POLICY NEED TO HAVE A TERM? WON'T IT PAY OUT WHENEVER I DIE?
You can take out whole-of-life policies that do pay out whenever you die. But because these policies always pay, they're more expensive.
More cost-effective policies provide cover for a set period (a term) and can be used to protect your mortgage, or provide for children until they are independent.
DO I GET MY MONEY BACK IF I DON'T DIE DURING THE TERM?
No. Please remember that Life Insurance is not a savings or investment product and has no cash value unless a valid claim is made.
It is designed to protect your loved ones if you die, and your loved ones won't need protecting if you don't die.
In the same way, car insurance won't pay out if you don't have an accident, and pet insurance won't pay out if your pet stays well.