Different life insurance policies and policy types have different eligibility rules. The most common rule is a maximum entry age which prohibits those over a certain age from taking out a policy.
Another is pre-existing conditions. You may be denied coverage if you have a pre-existing medical condition, or you may be charged higher premiums.
There is no standard maximum entry age for any policy and specialist insurers may offer higher maximums.
Expiry age is another number to watch out for. At this age, some policies will automatically cancel, while others will require an extra fee to continue your cover.
The values differ between insurers but this table provides a general guide of industry-standard ages:
|Type of cover||Maximum entry age||Expiry age|
Generally, you can still get life insurance if you have pre-existing conditions, but in some cases, your provider may deny you certain types of policy, charge extra premiums, or deny coverage for any claims resulting from that condition. Pre-existing conditions can include:
Your life insurer will also look at several other factors when assessing your policy, which could include:
They do this to get a clear picture of your overall health and assess your risk as a policyholder - any pre-existing conditions form a part of this overall assessment.
If you’re shopping for life insurance and you have a pre-existing condition, you must disclose it to your insurer upfront.
If you don’t and your insurer finds out, they will deny any claim relating to that non-disclosure and could even cancel your policy.
Every insurance policy is subject to underwriting - where a professional analyses the risks involved with insuring you. Every insurer has different eligibility criteria and assesses risk in its own way.
If you are deemed to be high risk because of lifestyle or other factors (i.e. smoking, recent serious illness) you may be denied cover, your premiums may be set higher and/or you may be denied cover.
If one insurer denies you cover there’s a good chance another will accept you, particularly if you apply through a broker or advisor.
There are a few different ways to buy life insurance including:
If you buy direct from an insurer you’ll have to find, compare and assess policies yourself. Usually, the best way to do this is by shopping online and either visiting each insurers site or using comparison tools.
If you’re confident that you know what you need and you’re willing to spend the time comparing policies and researching, this could be a good option for you.
If you buy through a financial advisor or insurance broker they’ll assess your needs and find a policy that suits you.
They’ll offer expert advice and a wide range of policies to choose from.
If you’re not sure how much cover you need or which type of insurance is right for you this may be a good option for you.
Many Australians have arranged life insurance through their superannuation and many super schemes automatically provide cover.
To check whether or not you have insurance you can:
Don’t choose this option just because it’s easy - make sure you consider everything on the market and shop around before selecting a life insurance policy.
Types of cover offered usually include:
Significantly, your super will pay for your life insurance, so choosing this option may also put a dent in your retirement fund.
It’s also important to keep in mind that if your super balance dips below a certain level, or you don’t contribute for 16+ months your policy may be automatically cancelled.
The cost of life insurance is different for everyone.
It depends on a variety of factors, including your health and circumstances, which policy you choose and your level of cover, just to name a few.
With life insurance the general rule is the higher risk you pose as a policyholder, the higher your premiums may be.
Your level of cover and policy type will also influence your premiums:
The policy you choose can also affect the cost of your premiums. Factors to consider include:
Research shows that cost is the most important factor for most Australians when choosing life insurance, but it’s not everything.
It may be more important to get a policy suited to you and your circumstances than it is to save a few dollars every month.
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