Life Insurance FAQs: The Questions Australians Actually Ask

Do level premiums ever increase? Yes. Level premiums are designed not to rise with your age each year, but they can still increase through indexation of your cover and product-wide rate changes. They are far more stable than stepped premiums, but not frozen. See stepped vs level premiums.

Why did my life insurance premium go up? Usually because of age (on stepped premiums), automatic indexation increasing your cover, or an insurer re-rating a whole product group. A long-held policy can also drift above market rates without a review. See why your premium went up.

Is paying for insurance through super free? No. The premiums come from your super balance instead of your bank account, so it eases cash flow but reduces your retirement savings. It is still your money. See is insurance through super free.

Is the insurance in my super enough? Often not on its own. Default super cover is convenient but is frequently below what a family needs, can have stricter definitions and limited income protection benefit periods, and can reduce or stop over time. See is my super insurance enough.

Does income protection cover redundancy? No. Standard income protection pays a portion of your income (generally up to about 70%) if you cannot work due to illness or injury, after a waiting period. It does not pay if you are made redundant or cannot find work. See does income protection cover redundancy.

What is agreed value vs indemnity income protection? With agreed value your benefit was set from income verified up front; with indemnity it is based on your income before a claim, so a drop in income can reduce it. Agreed value has not been sold as new business since 31 March 2020. See agreed value vs indemnity.

Can I get life insurance with a pre-existing condition? Often yes. A condition does not automatically make you uninsurable, and outcomes vary by insurer, so a single decline is not the final word. A broker can take your case to the whole market. See life insurance with a pre-existing condition.

Does vaping count as smoking for life insurance? Generally yes. Most insurers treat nicotine use, including vaping, as smoker status, which usually means higher premiums. Definitions and non-smoker waiting periods vary by insurer. See does vaping count as smoking.

How much life insurance do I need? A common starting point is your debts, the income your family would need to replace, future costs like education, and final expenses, minus assets and cover you already hold. The right number is personal. See how much life insurance do I need.

What is the difference between trauma and TPD? Trauma pays a lump sum on diagnosis of a defined serious illness, whether or not you can work. TPD pays if you become totally and permanently unable to work. See trauma vs TPD.

How do I switch life insurance without losing cover? The golden rule is to never cancel your old policy until the new one is approved and in force, to avoid a gap. Switching usually means fresh underwriting. See how to switch without losing cover.

Do life insurers actually pay claims in Australia? Yes, the large majority of claims are paid (APRA publishes industry claims statistics). Claims most often fail due to non-disclosure or definitions not being met, which is why honest disclosure and the right policy matter. See do insurers actually pay claims.

Can my insurer cancel my cover if my health gets worse? Quality retail cover is generally guaranteed renewable, so as long as you keep paying, the insurer cannot cancel you or single you out for a rise because your health changed. See can my insurer cancel my cover.

How do I know a life insurance adviser is legitimate? Check they are on ASIC's Financial Advisers Register (on Moneysmart) and ask for their Financial Services Guide. See how to check an adviser is legitimate.

How are life insurance brokers paid? Usually by commission from the insurer, built into the standard premium rather than added on top, and capped under regulation. It must be disclosed. See how brokers are paid.

• Is Life Insurance Worth It?
• Life Insurance and Superannuation
• Own vs Any Occupation TPD
• What Is Buy-Sell Insurance?

Still have a question? If your question is not answered here, or you want advice for your own situation, our team is happy to help. Click Get Started to book a no-obligation consultation.