Buying Life Insurance in advance is important for everyone these days because it helps protect your family from devastating financial loss if something happens to you in the future. Life insurance especially at an early stage of life provides financial security and helps to pay for living expenses and medical expenses in the future. There are many popular life insurance policies in Australia and one can pick the best life insurance policy as per requirements and suitability. While choosing a life insurance policy, one should keep in mind what is best for you might not be best for others.
What is Life Insurance?
Life insurance is a contract between you and the insurer, where you pay regular premiums, and in return, the insurer guarantees a sum of money to your beneficiaries upon your passing. This financial safety net ensures that your family members can maintain their standard of living and cover expenses such as mortgage payments, education costs, and everyday living expenses even after you’re gone.
Types of Life Insurance Policies in Australia
Term Life Insurance
Term life insurance provides coverage for a specified period, usually between 10 to 30 years. If the policyholder passes away during the term, the beneficiaries receive the death benefit. It is an affordable option with no cash value component, focusing solely on providing protection during the policy term.
Whole Life Insurance
Whole life insurance, also known as permanent life insurance, offers lifetime coverage. It not only provides a death benefit but also accumulates a cash value over time. This policy can be an excellent investment as it allows you to access the cash value or even borrow against it in emergencies.
Universal Life Insurance
Universal life insurance is a flexible policy that allows you to adjust your premium payments and death benefit as your financial needs change. It also builds cash value, similar to whole life insurance, and offers the potential for higher returns.
Income Protection Insurance
Income protection insurance is a policy that provides a steady income if you are unable to work due to illness or injury. It ensures that you can still meet your financial obligations and maintain your lifestyle during difficult times.
Factors to Consider When Choosing the Best Life Insurance in Australia
Before selecting a life insurance policy, it is crucial to determine the coverage amount your family would need to maintain their lifestyle and cover expenses in your absence. Consider factors such as outstanding debts, future education costs, and daily living expenses.
Premiums and Affordability
Compare the premiums of different life insurance policies to ensure they fit within your budget. Keep in mind that while some policies may have lower initial premiums, they might increase over time, so consider the long-term affordability.
Look for additional policy riders that can enhance your life insurance coverage, such as critical illness coverage, accidental death benefit, or disability cover. These riders provide extra protection and peace of mind.
Reputation and Financial Stability of the Insurer
Research the reputation and financial strength of the insurance companies you are considering. Choose a reputable insurer with a strong track record of fulfilling their commitments to policyholders.
Exclusions and Limitations
Be aware of any exclusions or limitations in the policy. Some life insurance policies may not cover specific causes of death or have waiting periods before benefits are paid out.
Top 5 Best Life Insurance Providers in Australia
Here are 5 top picks of the best life insurance in Australia for you and your loved ones.
TAL LIFE INSURANCE
TAL Life Insurance is one of the cheapest and best life insurance in Australia, especially for people who are 30-50 years old. It is cheaper than other life insurance policies from companies like NobleOak, Zurich, and Suncorp. Benefits for their optional TPD cover include a lump sum payment of up to $3 million, a built-in $10,000 max Critical Illness cover for children, up to $500,000 in advance for certain injuries, and more (T&Cs and exclusions apply).
As a special something, TAL offers an inflation protection benefit on eligible policy anniversaries to keep pace with the rising cost of living (T&Cs apply). Eligible policyholders under the age of 30 could also access a premium freeze benefit to maintain a fixed annual price (for reduced coverage over time). No doubt, TAL comes in hot with Exceptional Value Life & TPD Insurance for 2023.
NOBLEOAK LIFE INSURANCE
NobleOak Life Insurance is one of the best life insurance in Australia and also came out on top in the 2023 Finder Awards. NobleOak paid out 96.90% of claims in the latest period. This was higher than the industry average of 92.4%. Zurich life insurance did pay 98% of claims, but NobleOak was faster at processing claims and had a lower policy cancellation rate.
You can get up to $25 million in cover in NobleOak which is more than the industry average. You can also get a policy up to the age of 69. Most stop offering cover at 65. NobleOak Life Insurance claims processing time is also just 1.1 months. This is less than half as long as the industry average of 2.8 months.
ZURICH EZICOVER LIFE INSURANCE
Zurich Ezicover Life Insurance is one of the best life insurance in Australia because its 98% claims acceptance rate is higher than any other life insurance in Australia and well above the industry average of 92.4%, according to the Australian Prudential Regulation Authority (APRA). Zurich life insurance is good if you want a cheap policy from a well-known insurer. According to 2023 research, Zurich consistently offers some of the cheapest life insurance policies in Australia.
It has a very simple application process and a calculator that can help you estimate how much life insurance you might need. This can be helpful as it can be difficult to work out. Zurich’s life insurance has flexible lump sum cover that ranges from $50,000 to $1.5 million, depending on the age and needs of the insured party. Zurich also offers a $15,000 cash advance payment after the death of the insured person, which you may receive while your claim is being assessed, to cover funeral costs for example.
RAC LIFE INSURANCE
RAC Life Insurance can also be counted as one of the best life insurance in Australia. You can get up to $25 million in cover in RAC Life Insurance. The average is $1 million. It is a WA brand but it’s anyone in Australia can take out cover. You can also add up to $5 million for total and permanent disability cover.
Its policies are also issued by NobleOak, one of Australia’s most popular providers except you also get access to ongoing RAC benefits which include discounts on shopping, accommodation, and money off fuel. RAC Life insurance is the third cheapest life insurance policy, according to Finder Awards. However, TAL and NobleOak Life Insurance tend to be slightly cheaper than RAC Life Insurance.
BUDGET DIRECT LIFE INSURANCE
BudgetDirect Life Insurance is one of the best Life Insurance in Australia because it continues to offer one of the most competitively priced policies across the broadest range of customers. Budget Direct’s life, income protection, TPD, and trauma insurance covers are designed with security in mind. For customers looking for multiple insurance policies from the same provider, Budget Direct could be a compelling option.
From the given above policies that can be considered as best life insurance in Australia as of 2023, you can choose the one which suits you best. View each policy’s key features side by side and filter by the features that matter most to you. The best life insurance policy from given above list should fit comfortably into your individual needs and budget. To provide your loved ones financial security in the event you can no longer support them, getting a good Life Insurance policy is very important that best meet your needs.
FAQs About the Best Life Insurance in Australia 2023
Is life insurance necessary for everyone?
Yes, life insurance is essential for anyone with dependents or financial obligations. It ensures that your loved ones are financially protected when you are no longer there to provide for them.
Can I change my life insurance policy after purchasing it?
Yes, you can make changes to your life insurance policy, such as increasing or decreasing coverage, adding riders, or updating beneficiaries. However, some changes may be subject to underwriting and approval.
What happens if I miss a premium payment?
If you miss a premium payment, some policies may have a grace period during which you can still make the payment without the policy lapsing. It’s essential to contact your insurer as soon as possible to discuss your options.
Is life insurance payout taxable in Australia?
In most cases, life insurance payouts are not subject to income tax in Australia. However, it’s advisable to consult a tax professional to understand the specific tax implications based on your individual circumstances.
Can I have multiple life insurance policies?
Yes, it is possible to have multiple life insurance policies to enhance your coverage. However, you should evaluate your overall insurance needs and affordability before making a decision.
Can I purchase life insurance online?
Yes, many insurance providers offer the option to purchase life insurance online. It can be a convenient and straightforward way to compare policies and find the best fit for your needs.