What is life insurance?

Life can be mysterious, but life insurance doesn’t need to be. Here’s what you need to know about life insurance, that can help provide financial security for you and your family.

If something unexpected happens, having life insurance can help protect you and your loved ones financially. If a death, a life changing illness or injury happens to you, life insurance means your family can:

  • be supported in keeping the household running;
  • cover commitments such as the mortgage, rent or school fees; and
  • meet day to day living expenses.

 

A woman on a hammock smiling

What are the different types of life insurance?

Life insurance is designed to help protect you and your family when the unexpected happens. You have options to choose from, the best part is, you’re in control! It’s your decision and you can choose the types and levels of cover you believe will suit you and your family’s needs best. Some life insurance policies offer life insurance only. Some offer a range of benefits.

Medibank Life Insurance offers a broad range of benefits including:

●  Life Cover. This is the key benefit of life insurance, providing a lump sum payment if you pass away or are diagnosed with a terminal illness and are not expected to live for more than 12 months.1

●  Total and Permanent Disability (TPD) Cover. When you take out Life Cover, you can choose to add TPD Cover.2 This provides a lump sum payment if an illness or injury means you’re totally and permanently disabled and you’re unlikely to ever return to work.

●  Critical Illness Cover. This is another option you can choose to add to your Life Cover.3 It can pay a lump sum if you experience one of several serious critical illnesses, including cancer or a heart attack.

●  Child Cover. Cover for your children can also be added to Life Cover.4 This provides a lump sum payment if your child is diagnosed with a terminal or critical illness, or if they pass away. This type of cover can be an invaluable source of financial support if you need to take time out from your job to provide care or to cover your child’s medical expenses.

Medibank Life Cover also includes a Death Advancement Benefit5 payable if you pass away, which can help your family with the cost of your funeral while your Death Benefit claim is being assessed.

There’s also a Grief Support Benefit6 which can help cover the cost of grief counselling sessions for yourself or your loved ones if a benefit (other than a Child Cover benefit) is paid.

 

What are life insurance premiums?

Premiums are the amount you pay for your insurance.

With Medibank Life Insurance, you can choose to pay your premiums either fortnightly, monthly or annually. The total premium will be lower if you choose to pay it annually.

For Medibank Life Insurance, premiums are recalculated each year and are based on:

  • your age;
  • the cover types and sums insured you’re insured under; and
  • if you’re eligible to receive premium discounts.

Premiums will generally increase each year in line with the increase in age and any increase to your sum insured. These types of premiums are called ‘stepped premiums’ (variable age-stepped premiums).

 

What is term life insurance?

Term life insurance cover usually provides a lump sum payment if you are paid a claim.

Medibank Life Insurance is term Life insurance. Unless a successful claim or a request is made to cancel the cover, Medibank’s Life Cover expires on the policy anniversary immediately following the insured person’s 99th birthday.

 

How much life insurance do you need?

How much life insurance you need will depend on your personal circumstances, your financial situation, and your reasons for taking out life insurance in the first place.

For tailored advice on how much cover you need, you should speak to a financial adviser.

 

How much life insurance can you get?

How much cover you can get depends on a few different factors, including your age and income. The amount of cover available can also differ from one life cover provider to another.  

With Medibank Life Insurance, the maximum Life Cover that can be applied for depends on your age:

Ages 18-45 -$2,500,000.  

Ages 46-55 - $1,500,000.

Ages 56-60 - $750,000.

Ages 61-70 - $500,000.

The minimum Life Cover you can apply for at any age is $50,000. The amount you can apply for can also be dependent upon your annual income.

For Total and Permanent Disability and Critical Illness cover, the maximum amounts you can apply for are also based on how old you are when you apply and in some instances, your annual income.

 

What’s the Life Insurance Code of Practice?

The Life Insurance Code of Practice is the life insurance industry’s commitment to customer service standards and it’s designed to protect you, the customer. To understand more, click here.

Ready to get or talk about life insurance? Have a look at the Medibank Life Insurance PDS. You can also get a quick quote online or call the Medibank team on 1300 152 271 if you’d like to talk to us.

 

Things you should know

1 For the definition of terminal illness, please refer to the PDS.

2 For details on the optional TPD Cover, including definitions and eligibility criteria, please refer to the PDS.

3 For details on the optional Critical Illness Cover, including definitions, qualifying periods, and eligibility criteria, please refer to the PDS.

4 For details on the optional Child Cover, including definitions, qualifying periods, and eligibility criteria, please refer to the PDS.

5 Subject to satisfactory evidence that Death Benefit will be payable. The Life Cover sum insured will be reduced by the amount paid under this benefit. Please refer to the PDS.

6 Only payable if we have paid your Life Cover, Critical Illness Cover, or TPD Cover sum insured. Reimbursement is up to $1,000 per insured person and must be claimed within 12 months of the payment of your sum insured. Other criteria apply, please refer to the PDS.

 

Life Insurance

Medibank Life Insurance and Medibank Income Protection (collectively Medibank life insurance) are issued by the insurer, Zurich Australia Limited ABN 92 000 010 195 AFSL 232510 (Zurich). NEOS Direct, a registered business name of NDLI Pty Ltd ABN 70 665 747 277 AFSL 547119, distributes and services Medibank life insurance, which is promoted by NEOS Direct's authorised representative Medibank Private Limited ABN 47 080 890 259 (AR No. 286089) (Medibank).  

Any advice provided is general only and doesn’t consider your objectives, financial situation or needs. You should consider these factors, the appropriateness of the advice, and carefully read the relevant Product Disclosure Statement (which sets out the product terms, conditions and exclusions), Target Market Determination and Financial Services Guide before making a decision to acquire, or continue to hold, the product.

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