Life Insurance

Generally speaking the retail life insurance policies we specialise in will pay out for life insurance if:

  • The life insured was to pass away; or
  • Be diagnosed with a terminal illness (typically with less than 12 months to live); and
  • Most policies also come with a built in funeral plan (typically around $10,000, but may vary according to the size of the life insurance policy)

There are some key questions most people have around life insurance when they are taking out a policy. Chief amongst these is usually how much cover will I need?

Some key points to consider might be:

  • An outstanding mortgage, or any other substantial loans the principal breadwinner might leave behind.
  • Any current assets.
  • Funeral costs.
  • Death duties.
  • Childcare, education and living expenses for dependents left behind.
  • Financial security for not just a subsistence lifestyle, but a comfortable one for family members.

The Australian Government provide an excellent life insurance calculator, which can help guide you on indicative insurance amounts you may require. In most cases you can secure up to 20x your income in life insurance benefits without needing to provide financial justification to the insurance company.

A loved one passing, or being diagnosed with a terminal illness, is not something pleasant to think about or discuss. But statistics show that these events do happen in the community and also to people right across the age spectrum. Just because you might be in peak physical condition, or a young newly-wed with seemingly your whole life ahead of you, doesn’t mean that an illness, a road accident or a workplace fatality couldn’t happen at any time, and have loved ones left behind facing serious financial challenges.

Some frequently asked questions

There seems to be so many insurers and so much variety out there with policies? How would I know if I’m making the right choice?

That’s very true. Policies do vary greatly between different companies and what may be perfect for your next-door neighbour may not be appropriate for you.

At SMFS Insurance Partners we are experts at navigating the various insurance options from our extensive panel of leading insurance companies. We can provide you with a full comparison. In this scenario a trained insurance consultant will find out information about your lifestyle, work, and medical history, before helping you select an appropriate policy, and then also assist you in applying for it. This is an approach that can help to separate the range of life insurance products out there into a few easily understandable categories.

For instance, in Australia, we typically have a choice between what’s known as group, direct, or retail insurance policies. Group insurance is when members of a company, or super fund, operate under a single contract. Direct policies are purchased over the phone or online directly from an insurance company. The third category, retail policies, like the kind we deal with at SMFS Insurance Partners, are policies where a consultant will find out the subtleties of what you require and tailor a policy to your needs.

I’ve heard that sometimes life insurance policies don’t pay out, is this true?

The overwhelming majority of life insurance policies do get paid out upon death. But there are some reasons why a company may not. These include:

  • Payments have been missed on a policy and it has lapsed.

Keep policy payments up to date.

  • Policy exclusions. There might have been exclusions on the policy. There could be a pre-existing condition that was excluded when you took out the policy.

Always check your policy thoroughly through in detail for this.

  • You have lied, knowingly or unknowingly during the application process.

Your insurer may not pay out if they discover a non-disclosure when you die. This usually comes about by not answering questions to the best of your knowledge and leaving important information out of your disclosure.

Is life insurance taxed?

In most instances insurance payouts for life insurance are not taxed. There are however some exceptions. For example, if your policy is held inside super and the payout is to a non-dependent. We can provide general advice when discussing your life insurance requirements.

As is evident there are a number of important considerations to make in comparing, selecting and applying for any life insurance policy. To assist you in making the correct choice for you and your loved ones SMFS Insurance Partners are available to meet with you and discuss your needs. Please contact us at your convenience on (07) 3064 0413 or leave a message on the contact us section of our website.