10 Questions To Ask Yourself When Considering Life Insurance Options

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Are you at the point where you're considering life insurance? Maybe it's something you've been thinking about, or perhaps you have a young family. The task can seem a little daunting, but it really doesn't have to be. You can make things easier for yourself, and hone in on what's best for you by asking yourself these questions.

1. How much cover do you need?

Even before reviewing life insurance quotes, think ahead to determine how much it will cost to protect your family and, importantly, how much you can afford. Come up with an overall estimate of your financial situation, including whether you own property, your savings, and your superannuation (and whether it includes some life cover already).

Weigh these assets against debts such as a mortgage, loans, childcare and/or education costs, and come up with a number that will sufficiently compensate your beneficiaries. You can make use of Lifebroker’s life insurance calculator to help you understand how much cover you may need.

2. How do you get insurance quotes?

Shop smartly. There are numerous insurance providers online that can help you by providing policy pricing based on some information you provide. However, many of these are cumbersome or, if you’re going to every provider’s website one-by-one, it can be very time consuming.

Using a comparison website can not only save you money, but also time spent trawling the internet. It’s a simple shortcut that allows you to plan your family’s security from the comfort of your own home or even on your commute - and save money that may have otherwise been spent on a financial planner.

3. Master the terminology

One reason life insurance quotes can seem overwhelming is because first time buyers don't always know the jargon. Familiarise yourself with definitions of policies such as Total and Permanent Disability (TPD), Income Protection, and Critical Illness or Trauma covers, and learn industry terms such as ‘beneficiary’, ‘stepped’ and ‘level’ premiums.

4. Stepped or level premiums?

This will depend on how long you are planning on keeping the policy. Stepped premiums start off cheaper, but increase as you age. Study your quotes to learn by how much they will increase, and whether this will be affordable down the road. Level premiums are more expensive to start off with and do not increase in price as you age.

However, both level and stepped premiums can also increase based on rates of inflation and insurer's fees. Some insurance companies offer the option to remove Inflation Protection, so that can also help keep the ongoing payments more consistent. It’s important to note that some level premiums also revert to stepped premiums at aged 65 depending on the product.

5. Are there discounts available?

Assess your life insurance quotes to determine how much more it is to bundle life cover with beneficial supporting insurances such as Income Protection, TPD, Trauma (also known as Critical Illness). It can sometimes be more cost-effective to pay a fraction more per month in premiums for a whole lot more in coverage.

Lifebroker's tool allows you to compare life insurance quotes based on policy details or solely on price. Some insurers also offer discounts based on certain criteria. TAL, for example, offer up to 15% off their products if you fit between a certain BMI range.

6. What are the Exclusions, Limitations, and Fine Print?

What is the waiting period before payout in the event of death? Will the insurance pay an advance to help cover funeral arrangements? How many and what type of critical illnesses are covered in a Trauma policy? Will coverage be void if death is the result of suicide?

These are some of the limitations and exclusions to review in insurance quotes. Researching this information can help you to decide which policy is most advantageous for your family and your circumstances.

7. Does it fit your needs?

Think about your circumstances, and your family's needs. Take into account what kind of policies offer the greatest peace of mind to your family now and into the future. We’re all unique, and thankfully consumers are more empowered than ever to compare, contrast, and make the most informed decisions for themselves.

8. How reputable is the insurance company?

You want to know that you can trust your life insurer, should something ever happen to you, your family will want to have the peace of mind that they can rely on the company you’ve chosen. Bodies and websites like the APRA have plenty of independent information on individual registered life insurance companies.

9. Have you considered your lifestyle and family history?

If you’re into rugby or adventure sports and are considering TPD cover, make sure your insurance quote includes options for sports related-accidents. If cancer runs in your family, it may be wise to look at quotes for critical illness cover, and to make sure that illnesses such as stroke, heart attack, and specific cancers are covered.

There may also be discounts for health and wellbeing initiatives such as regular exercise, maintaining a healthy body mass index, and not smoking.

10. Can you suspend or resume life insurance?

It can be difficult to continue paying life insurance premiums intended to protect your family if you hit a rough patch and can't pay the bills. If you're experiencing financial hardship and struggling to make ends meet, you want to know that you have options to help.

When reviewing your insurance quotes, determine if reducing coverage is an option, and ensure you review wait times and age restrictions, around renewing cover.


To discover more about how much cover you may need, try Lifebroker's life insurance calculator today. The above is General Advice only and does not consider your personal objectives, financial situation or needs.

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