Life insurance can help protect you and your loved ones financially if something unexpected happens.
What life insurance covers
Different life insurance products are designed to protect you from different events that can occur:
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
What to check before you buy life insurance
Before buying, renewing or switching insurance, check if the policy will cover you for claims associated with COVID-19.
Before you buy life insurance, by law an insurer must give you a Product disclosure statement (PDS). Check the PDS 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
Also check whether you already have life insurance through your super. Make sure you’re not paying for insurance twice.
Please contact us on Phone 03 9038 9449 if you seek further assistance on this topic.
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/how-life-insurance-works
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