7 things you didn't know about life insurance

When it comes to life insurance we all know the basics, but here are seven things you might not have expected.

1. You can get life insurance with a pre-existing medical condition

In Australia, having a pre-existing medical condition doesn’t automatically exclude you from getting cover. It’s important to  first understand the potential barriers to help get the cover to suit your circumstances.

2. The premium structure affects how premiums may rise in the future

Life insurance premiums are based on a number of factors of your premium type, including age, gender, occupation and smoking status. The structure of your policy, be it a stepped or level premium, can impact how much they rise and how often.

3. Superannuation alone may not provide adequate cover

It’s widely seen that superannuation provides suitable life insurance cover. This may not always be the case, with over half of Industry Super Fund members under insured by $100,000 . It’s worth taking a closer look at how much your super will actually provide in the event of a payout. 

4. The value of underwriting

Underwriting is the process used to assess a person’s risk, and provide the premium a person pays to cover that risk.  The more information you provide us, the more tailored your cover will be to your own needs. 

5. Renewal of most life insurance is guaranteed 

Once you have taken a life insurance policy, there’s no obligation to notify your insurer of a change in your health or lifestyle. Given you pay your premiums on time your policy will be renewed each year, up to the maximum age renewal on your policy. This means getting covered when you’re young can be a cost effective way to stay covered in the future.

6.Redundancy cover can't be offered by life insurers

While life insurance policies can’t provide payouts when you lose your job, there are other forms of insurance that can. 

7. Life insurance advice must legally be in your best interest

With so many policy options in the market, and lots of information available, getting the right advice is extremely important. The good news is, the new Future of Financial Advice (FOFA) legislation means financial advisers are legally bound to provide advice in the best interest of the individual, not the business, institution or financial adviser themselves.

Please note that the information provided in this article is not advice but general information only.

*Source: Australian Institute of Superannuation Trustees (AIST) and Industry Funds Forum (IFF) - See more at Lifewise.