Life Insurance Types in Australia

There are 4 different life insurance products available to help you cover your income, debts and lifestyle costs. They usually called life insurance types:

• Term Life Insurance
• Trauma Insurance
• Total and Permanent Disablement Insurance
• Income Protection Insurance

Term Life Insurance

Term Life Insurance provides a one-off lump sum payment in the event of your death or terminal illness (less than 12 months to live). It's the only type of life insurance where you will not get benefits yourself. Most of the time payment will be paid to your family or other beneficiaries you name.

Term life insurance payment can help your family continue to live the life you’ve planned together:

• focus on living life without worrying about finances,
• stay in the family home – pay off the mortgage or cover the rent,
• keep the kids at their school and make future education plans
• on-going day-to-day living expenses.

Trauma Insurance

Trauma insurance pays you a one-off lump sum if you have a serious medical condition (like cancer, heart attack, stroke or an accident), so you can focus on recovering without worrying about finances. You could use the benefit to:

• cover your out-of-pocket treatment costs – or afford the best treatment available!
• make lifestyle changes so you can focus on healing – like permanently reducing the number of days you work
• take some time off work or take a stress-free family holiday.

Total and Permanent Disablement

Total and Permanent Disablement Insurance (TPD Insurance) is normally an extra cover on a life insurance policy and usually covers you for some permanent disability that prevents you from working in your usual occupation.

TPD insurance helps you modify your lifestyle and gives you choice and options if you're left without the ability to work. TPD generally allows you to claim it only once and payment can help you:

• fund lifestyle changes and home modifications,
• cover the cost of long-term care or medical expenses,
• pay off any debts including your mortgage, 
• fund an ongoing income for your family.

Income Protection Insurance

Income Protection Insurance pays you a monthly benefit if you can’t work due to sickness or injury. Main requirement is that you have to work or receive some kind of income that stops if you get injured.

In Australia most income protection policies will pay you up to 75% of your net income either for a limited period or until you reach the age of 65. The money can help you:

• cover your mortgage or rent payments,
• continue to make your repayments on your car,
• take care of all your normal bills while you focus on getting better.

More about Life Insurance Types

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