Life insurance is one of the ways that individuals can protect themselves and their loved ones from unexpected events.

There are different types of cover to choose from, depending on what you need to be insured from. These are:

• Life cover– pays a lump sum when you die
• Total and permanent disability (TPD) insurance– pays a lump sum to help with rehabilitation and living costs
• trauma insurance — covers you if you’re diagnosed with a major illness
• income protection insurance — pays some of your income if you can’t work due to illness or injury

Before you buy life insurance, it is important to look at the product disclosure statement (PDS), and check for:

• what’s covered and what’s excluded under the policy
• what information you’ll need to give an insurer
• information on premiums and how they change over time
• waiting periods before you make a claim
• how to make a claim
• how to complain about the claims process or decision

Be sure to check what insurance you may already have with your superannuation, to make sure that you are not paying for insurance twice.

Sources:

• https://moneysmart.gov.au/how-life-insurance-works