What is Life Insurance?

Nothing in life is certain, but this shouldn't prevent anyone from enjoying it. The key here is to minimise your risk and ensure that your family is well provided for should you die. This is where life insurance comes in. It gives your loved ones the protection that they need in case of an emergency.

What's Included in a Life Insurance

Different insurance companies typically differ in their specific offers. Some provide low-cost premiums but with limited coverage. Others have comprehensive coverage but come at a steep price. What's important is that you decide for yourself what features are important to you and your family. Here are some of the more common ones found in your usual term life insurance policy:

a. Lump sum payout. Should you die, your beneficiaries will receive a lump sum amount. They won't be limited on how they can spend the money. They can use it for your funeral expenses, hospital bills, or they could use it to pay off the mortgage and other financial obligations.

b. Advanced payment for terminal illness. It can be financially difficult for you and your family if you suffer from a terminal illness. The great thing, however, is that term life insurance can provide you with an advanced payment, which can help cover for your immediate financial needs during this trying time.

When getting life insurance, also clarify with your insurer what extra features are available and what their limitations are. This is important, as your insurer might not cover a specific type of illness, which could break the deal for you.

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Published on February 2-th, 2013 in Insurance
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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Not all providers in the market are included in the comparison.

Any information or advice contained on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs.

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