Life Insurance – How Can You Find The Best Cover?

Life insurance may help protect your family in the event that something goes wrong. However, picking the right policy that provides adequate cover can be difficult. That’s why Monzi’s here to help you get the ball rolling. Read on for our quick and easy life insurance guide. We’ll cover a range of information you may need to consider. Let’s go.

Please note, certain ideas and products presented in this article may not be offered by Monzi nor the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What is life insurance?

You can insure your car, your boat, your home and even your pet. However, did you know that you can also insure your life. In short, life insurance exists to protect your family and provide some financial security, via a lump sum payment, in the event that your life ends prematurely.

As with all insurance though, policies do vary. Not only are there different types of cover, but there are also different levels of cover too. In addition to this, as with home insurance or other insurance products, you must pay a monthly or annual premium that will vary based on the policy you take out.

While that covers the basics, there is much more to know. Read on for Monzi’s extensive breakdown of life insurance which will address many of the key factors that you may need to consider.

What types of life insurance Australia are there?

Life insurance comes in a few different forms. As a result, you must understand each type to determine which is the best option for you. With this, keep in mind that you may be able to combine certain policies to increase your level of cover. See below for more details:

Life cover

Life cover is the standard life insurance policy that you may be aware of. In short, if you pass away, then your family or beneficiary may submit a claim. If approved, they will receive a lump-sum payout equal to your level of cover. That way, you may secure your family’s financial position in the event that something goes wrong.

Total and permanent disability cover (TPD)

In many cases, TPD is offered as an optional extra on your life insurance policy. With this, your insurer will payout a lump sum cash amount if you become totally and permanently disabled. This payout is designed to assist you with covering living and rehabilitation costs that may result from your change in circumstances.

Trauma cover

Trauma cover may also be referred to as critical illness insurance. In short, if you are diagnosed with an illness or suffer an injury that is covered by your insurance policy, then you may be able to access a lump sum payout from your insurer to cover your medical bills and other associated costs.

As a guide, you may add trauma cover as an extra on your life insurance policy. However, keep in mind that insurers will factor any extras into the cost of your premiums. In other words, it will increase your premiums.

Income protection

Income protection insurance may secure your financial situation if you are unable to work for a period of time due to illness or injury. In short, it will pay you an agreed upon portion of your current salary (e.g. 75%) until you either return to work or your benefit period elapses, whichever comes first. Generally, it will be paid as a monthly benefit. As a result, income protection insurance may provide a handy safety net if something goes wrong.

What determines life insurance premiums?

Life insurance premiums won’t be the same for everyone. Instead, insurers calculate your premiums based on a range of factors related to both your personal circumstances and your policy.

From a personal perspective, factors such as your smoking status, age, general health and occupation are all taken into account. When it comes to your policy, your level of cover as well as any extras you choose (e.g. trauma cover) may impact your premiums. Finally, your premium-type (e.g. stepped vs level) will also be used to determine what your premiums may be.

Ultimately, insurers will take all this information into account to calculate your premiums. Generally, you must pay your premium on a monthly basis. However, some providers may offer annual options too.

How much does life insurance cost per month on average?

As we’ve discussed, premiums do vary. As a result, stating what an average premium amount may be is difficult. That said, we may be able to give you some idea.

In most cases, if you are under 40, then your premiums may range from $30-50 per month if you are a non-smoker. However, as you age or if you are a smoker, then these figures will rise sharply and may range into the hundreds of dollars per month. In addition to this, keep in mind that if you are male, then your premiums may be slightly higher on average than if you are female.

In any case, this is simply a rough guide. If you would like further information, consider approaching a life insurance provider for a quote. Alternatively, visit one of the many comparison websites who may present all the information you need.

What are the two types of premium?

Generally, one of the key factors you will consider when taking out life insurance is the cost. Obviously, this will also apply to business insurance and other insurance products too. Given this, it’s important to be aware of the fact that insurers may offer two types of premiums: stepped and level.

Firstly, stepped premiums are calculated each time you renew your policy (e.g. annually). Given that the likelihood of making a claim increases with age, stepped premiums will likely go up as you get older.

Your second option is level premiums. Level premiums are more expensive when you initially take out your policy as they do not increase as you age. Instead, any increases in cost may be tied to changes in lifestyle factors or external factors, such as inflation.

When you apply, you may need to select one of these options. If you are unsure, then it may be wise to contact a qualified advisor who may provide advice tailored to your situation.

How much cover do I need?

In short, that will depend on your current life situation. As a result, it’s not a question Monzi can answer for you. Instead, you must take the time to evaluate your needs as well as your life insurance objectives to determine what an appropriate level of cover may be.

With this, keep in mind that the amount of cover you select will influence your premiums. So, you must find the right balance. While we’d all like to have the maximum cover possible, you must still ensure that it’s affordable for you. By the same token, simply finding the cheapest option may not provide adequate coverage.

Life insurance calculator Australia: how can it help me?

If you are unable to determine how much cover you need, then a life insurance calculator may make it easy. In short, these calculators will operate in a similar manner to other insurance tools such as home insurance calculators. Ultimately, their goal is to help you determine if you need life cover and how much you may need.

To calculate this, you will need to provide some information. For instance, the calculator may ask for your current family status (e.g. marital status, number of children, etc.), your current assets or liabilities (e.g. outstanding cash loans) and why you may need life insurance. From there, it can generate an estimate of the cover you may need.

Keep in mind with all calculators, including insurance or loan calculators, that your true needs or costs may vary. After all, these calculators are designed to only provide estimates and general advice.

Finally, a good place to begin may be the free life insurance calculator offered online by Moneysmart. Check it out today.

Which life insurance is the best?

Whether you’re looking for building insurance, private health cover or life insurance, one thing you will notice is that there is no shortage of options. In other words, insurers are dime-a-dozen. While this is great for consumers as providers fight for your business, it does make it difficult to determine which insurer is the best.

Ultimately, Monzi is unable to recommend a provider to you. After all, we’re a lender-finder who may help you access fast cash loans $300 to $10,000. Moreover, the best insurer for you may not be the best insurer for another person, as needs and preferences do vary. For instance, you may be looking for low premiums while another individual may be looking for extra coverage, such as income protection insurance.

Given this, consider what you need and do your research to determine which insurer may be best for you.

Is it worth it to buy life insurance?

Ultimately, life insurance is a safety net. While ideally you would never have to make a claim, knowing that it is there to protect you may provide great peace of mind. Obviously, though, you will have to pay monthly premiums for this.

Given this, it’s up to you to determine if it is worth it. If you are a parent or have other dependents who rely on your income, then life insurance may be a wise choice. After all, nobody can predict the future. A lump sum life insurance payout may ease some burden from your family should you pass away or lose the ability to work.

At what age should I get life insurance?

Unfortunately, there is no right answer. The best age to get life insurance may vary based on your current financial situation and life circumstances as well as a range of other factors. As a result, the best age for you to take out a policy may not be the best age for another individual.

Generally speaking, though, it may be a good idea to take out a life insurance policy if you have people who depend on your income. For instance, if you have a spouse or children. In addition to this, if you currently have debt that will stay with you, then life insurance may be a worthwhile option to alleviate any burden from your family, should you pass away.

One more thing to consider may be that at a younger age, your premiums may be lower, given that you will likely face fewer health concerns than someone who is older. As a result, it may be better to take out a policy at a younger age.

Ultimately, though, it’s up to you. Consider who may be relying on your income as well as any other relevant factors to determine if you should take out a life insurance policy.

Are there any life insurance exclusions?

Most insurance policies come with some standard features. For instance, you may have to pay an insurance excess if you make a claim. With this, they will also come with exclusions.

In short, exclusions are a list of events, circumstances and situations that are not covered by your policy. In other words, should they occur, you will be unable to make a claim.

To determine what your exclusions are, you must consult your Product Disclosure Statement (PDS). If you are unsure or have any questions, contact your provider. The last thing you want is to find out you’re not covered if something goes wrong.

Can I reduce my life insurance premiums?

Yes. If you’re short on cash or you feel you are paying too much, then it may be possible to reduce your premiums.

Firstly, you may be able to remove certain extras that you don’t need to reduce your cover. For instance, you may feel you don’t need income protection insurance and make the decision to remove it from your policy.

In addition to this, you may lower your level of cover. As a guide, if you currently have $500,000 worth of cover, reducing this to $300,000 or $400,000 may lower your costs.

Finally, you can ensure that you stay fit and healthy. With this, you could quit smoking, change careers into something less risky or give up that dangerous hobby.

At the end of the day, premiums come down to your policy and your risk. There are ways to potentially reduce your premiums. However, keep in mind that, in some cases, this may come at the cost of cover you need.

A happy family in a field who are covered by life insurance

Can high-risk individuals get life insurance?

Yes.

That said, as we’ve already covered, your premiums are directly tied to your risk. Therefore, if an insurer deems you to be high risk, then your premiums may be expensive to compensate for this risk. Generally speaking, your risk may come from one of the three factors listed below:

  • Occupation: are you in any danger at work? While working in an office may be low risk, other occupations do come with realistic dangers.
  • Lifestyle: dangerous hobbies such as rock climbing could lead to you being deemed a high-risk applicant.
  • Health: are you a smoker? Do you have any pre-existing medical conditions that may impact your health?

Note that it’s up to your insurer to determine your risk. Based on their assessment, they will determine if you are eligible to be insured and what your premiums may be.

How do I compare policies?

Much like you compare personal loans or mortgage loans, comparing life insurance is a necessary step to help you determine which policy is best for you. However, if you’re not sure where to start, allow us to provide some guidance. Key aspects you must compare include:

  • What’s your level of cover?
  • Is there a waiting period before you can make a claim?
  • What are the premiums and are there other fees?
  • Are there any exclusions?
  • Can you take advantage of any sign-up bonuses or offers?
  • Will your premiums rise over time?

Note that this may not be a comprehensive list. If you are unsure or need help deciding which policy is best for you, contact an insurance broker or other such professional and they may provide advice tailored to your situation.

Can I get life insurance quotes?

Yes.

If you’re looking to get an idea of what a life insurance policy may cost, then don’t hesitate to reach out to a provider and request a quote. Generally, insurers will provide quotes for free online or over the phone. Moreover, they come with no obligation for you to sign up. They’re simply designed to give you an idea of what your costs may be.

In order to calculate your quote, providers will need you to supply a number of necessary details. As a guide, this may include information such as your current family status, age, any pre-existing conditions, smoking status and much more. From there, they may be able to give you an idea of what your premiums may be.

Finally, don’t be afraid to seek out multiple quotes. If possible, compare insurers and the policies they offer to find one that offers the cover you need while still being suitable for your budget. Comparing quotes may be an easy way to do this.

What information do I need to provide?

As we’ve mentioned, your premiums are calculated not only on the policy that you select but on your current life situation too. As a result, when you apply to take out a life insurance policy, you must provide some personal details. While not an extensive list, details you may need to provide include:

  • Age
  • Height and weight
  • Occupation
  • Family status
  • Lifestyle factors (e.g. are you a smoker?)
  • Medical history (e.g. any pre-existing conditions)
  • Family history (e.g. are there any diseases that run in your family)
  • Other relevant information, for instance, do you have any risky hobbies?

Based on this information, your provider may be able to determine if you should be offered an insurance policy as well as what your premiums should be. With this, understand that your premiums are generally based on the risk and your level of cover. Insurers determine your risk based on the information you provide.

Should I switch insurers or renew my existing policy?

Ultimately, it’s up to you.

In most cases, it’s wise to review your insurance policies regularly to ensure that they provide adequate and appropriate cover. This is true not only for life insurance, but also for pet insurance, home insurance and any other insurance policy that you’ve taken out. Moreover, you should review your policies if your life circumstances change too (e.g. after having a child).

With this, if you decide that your policy is no longer adequate, then don’t be afraid to shop around. On the one hand, you may be able to increase or decrease your current level of cover by contacting your insurer. On the other hand, if you find a better deal with a different provider, then it may be best for you to switch your policy.

At the end of the day, it’s your job to find the policy best suited to your circumstances. As a result, ensure you consider all the options available to you. If you are able to find a better deal elsewhere, then don’t be afraid to make the switch.

How do I switch life insurance companies?

Before switching your policy, the most important thing to do is compare your options. However, once you have done that and found a suitable policy, then making the switch should be relatively straightforward.

Firstly, you’ll need to contact your current insurer to cancel your existing policy. In some cases, you may need to provide adequate notice. In addition to this, keep in mind that you shouldn’t cancel your existing policy until you find a suitable replacement.

Once that’s been taken care of, you’re free to take out your new policy. You’ll simply need to contact your new insurer to submit an application. If approved, you will then have a new policy that may be better suited to your current circumstances.

Finally, one thing to keep in mind is that if you switch policies, waiting periods may apply. In short, this is the period of time after taking out a policy that you cannot make a claim (e.g. six months). Contact your insurer to determine if this may apply.

Can Monzi help me find a life insurance policy?

Unfortunately, we cannot.

The purpose of this guide was to provide you with an informative guide to life insurance that may act as a starting point for you to find a suitable policy. However, we are not affiliated with any insurers and will be unable to assist you in any way.

In any case, what we may help you with is personal loans. Through Monzi’s lender-finder service, you may apply for personal loans online from $300 to $10,000. So, if you’ve got a pressing expense to pay today such as car repair bills, Monzi might be there for you. Apply during business hours and you may receive an outcome in just 60 minutes.

Apply today.

How do personal loans work?

Personal loans are your standard principal and interest loan product. In other words, you may borrow cash amounts from $300 to $10,000 today. However, your costs are then divided into a series of even repayments over a fixed term. As a guide, Monzi’s lenders may offer repayment terms ranging from 12 to 24 months.

In addition to this, it’s crucial to note that lenders charge fees and interest on all loans. That means you will always repay more than you borrow. While this may seem less than ideal, interest is simply the cost you must pay for the right to borrow money fast today. With this, consider any costs before applying, given that they can often be substantial.

Finally, you may use personal loans to cover a litany of inconvenient expenses. So, whether you’ve got a bill to pay now or emergency travel expenses to deal with, easy cash loans may be an option. Just ensure you consider your options, the costs and your financial situation before applying.

Can I get a personal loan with bad credit?

Yes, you may.

Is your credit history is holding you back? Do you think that it will stand in your way of a successful application? We’ve got good news. At Monzi, we know a handful of lenders who may offer loans to borrowers with bad credit.

For this to be possible, rather than solely assessing your credit history, they will also consider you budget. With this, if you can show that you’re in a secure financial position and have your budget under control, then this may be weighed against your past credit mistakes. As a result, your lender may consider approving your bad credit loan application.

However, keep in mind that approval is not guaranteed. While some lenders may consider bad credit applicants, others may not. As a result, your outcome may depend on the lender you are dealing with.

How do I apply with Monzi?

If you find yourself in a financial bind, then Monzi’s lender-finder may assist you. When you’re ready to apply, simply follow these easy steps:

  1. Select a loan amount and repayment term using Monzi’s loan slider.
  2. Provide the necessary details to complete Monzi’s online application.
  3. Let Monzi take over. Once we receive your application, we’ll do our best to match you with a lender from our extensive network.
  4. We’ll contact you via text or email with an outcome. If we successfully match you with a lender, then they will reach out to outline the next steps.

Note that we cannot guarantee if your application will be approved. All applications are subject to an assessment. As a result, if you are matched with a lender, then they will determine your outcome.

Contact Monzi

If you have any questions about Monzi or our service, contact us. Simply send your questions to hello@monzi.com.au and we’ll do our best to provide you with a prompt answer that addresses your queries or concerns.

That said, if you have questions regarding life insurance or the policy that may work best for you, then we will be unable to assist you. Instead, you may need to contact an insurer directly or make use of other online resources.

I’m not sure where to begin with life insurance: who can I ask for help?

While we’ve done our best to breakdown life insurance in a manner that is easily understood, we know that it can be difficult to know where to begin.

If you find yourself in this position, then ensure you read widely. For instance, Moneysmart provides a free and easy guide to understanding how life insurance works. Moreover, there are a plethora of other online sources that may be able to provide you with the advice you need. However, it’s up to you to seek this information out.

If the time has come for you to select a policy, then don’t be afraid to consult a professional. While comparison websites and other such tools may be useful, specialist insurance brokers may be able to provide advice tailored to your situation.

Ultimately, finding a life insurance policy isn’t a decision you should take lightly. As a result, you must use all the resources at your disposal to find the policy that’s best for you.

Life insurance and Monzi

While that brings to a close Monzi’s easy and accessible guide to life insurance, we’re here to help if you need a cash loan today. Apply today from $300 to $10,000. We may be able to match you with a lender before you know it. Use the loan slider at the top of the page or hit ‘Apply Now.’ We look forward to hearing from you.

Interested to learn more about insurance? You can check out more from Monzi with our guides to home and contents insurance, health insurance and much more.

Finally, you can stay across all the latest developments from Monzi by following us on Facebook, Instagram, Twitter and Pinterest.

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You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000

Terms

12 months

Costs

20% upfront establishment fee

+ 4% monthly fee

Example

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate

Loan amount

$2,001 - $4,600

Terms

13 months

24 months

Costs

48% annual percantage rate

67.41% comparison rate p.a.

Example

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Interest Rate for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000

Terms

13 months

24 months

Costs

21.24% annual percantage rate

48% comparison rate p.a.

Example

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principle Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Interest Rate for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.