FAQs for Consumers

General questions about life insurance

How much does advice cost?

Unlike personal advice where consumers are required to pay for a Statement of Advice, there are no costs associated for providing general advice.

How do I know how much insurance I need?

You should regularly review how much insurance you need against your life circumstances as it changes all the time. For example, the amount of debt, dependents, salary increases or changing occupations will impact on your insurance cover.

I have insurance through my superannuation fund. Is it the same as a retail policy?

The insurance under your superannuation policy is called a ‘group’ policy which means that there is no underwriting upfront and everyone is eligible.  This level of cover generally reduces when you turn 50. It also generally has a ‘pre-existing condition’ exclusion, which means you may not be covered if you have had health issues prior to taking out the cover despite paying premiums for many years.

Are all Income Protection policies the same?

No, they definitely are not all the same.  Some Income Protection policies will only cover you for one, two or five years and other policies will cover you to age 65 or 70. Different waiting periods apply before you can make a claim.

If I am unlikely to work in my profession again, will my Total and Permanent Disability (TPD) policy pay out?

It depends on the wording in your policy.  Some policies state that if you are capable of being re-trained in another occupation you won’t be paid out of your TPD policy.  There is also a difference between having an ‘own occupation’ versus an ‘any occupation’ policy – an ‘own occupation’ policy means exactly that – you are unable to work again in your own occupation and this is not available inside a superannuation policy.

Which insurance policies are tax deductible?

An Income Protection Policy that is owned outside of superannuation by the insured person is generally 100% tax deductible. Life Insurance, Total and Permanent Disability Insurance (TPD) and Income Protection premiums are all tax deductible to a SMSF or superannuation fund (not able to be claimed by the insured person).

I have changed occupations – should I review my Income Protection Policy?

You should review your insurance if you have changed from a manual occupation to a professional occupation. The difference in premiums that you pay can be quite significant. If your salary has changed, you should also review your income protection policy, because you don’t want to be surprised when you make a claim and find out you have been paying for cover that you won’t receive, or that the benefit you receive is a lot less than you should have been insured for.

I have a very good insurance policy that is suited to my needs. Do I need to review this regularly?

You should regularly review your insurance policy as your circumstances change all the time. Changes to your debt, dependents, salary increase or a change in occupation could increase the amount of cover that you need and the premiums that you pay. You should review your policy at least every five years or more often.

My premiums have become unaffordable. Should I cancel this?

Unless you are financially able to support yourself for the rest of your life, never cancel your insurance without speaking to a professional.  There are options available such as reducing cover, benefit periods, increasing waiting periods to changing insurance companies.

I have a medical exclusion on my insurance. Am I stuck with this for life?

No, if you have had a considerable time without recurring incidents, you are within your rights to ask the insurance company to review the exclusion.  Do bear in mind that any other issues you may have had in the last five years or so will be considered by the underwriter.

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