What is Life Cover?

Life Cover (also known as term life insurance or death cover) provides a one-off lump sum payment to your chosen beneficiaries if you pass away. If no one is nominated, the funds are typically paid to your estate or superannuation trustee.

How it works:

Terminal Illness Benefit: Many policies include a "living benefit," paying out the lump sum early if you are diagnosed with a terminal illness.

Financial Support: The payout helps your family manage major costs like mortgages, debts, and everyday living expenses.

Important Note: Life Cover is broader than Accidental Death Insurance. While Life Cover generally includes death from illness, Accidental Death only pays out if you die in a specific type of accident and often carries more exclusions.

Do You Need Life Cover?

The simplest way to decide is to look at who relies on you.

If you have a partner or dependents: Life cover provides a vital safety net. It can help your family pay off the mortgage, settle debts, and cover day-to-day living costs if you're no longer there.

If no one relies on you financially: You might not need life cover right now. However, it’s still worth protecting your own earning power.

Tip: If you're single or don't have dependents, consider Income Protection, TPD (Total and Permanent Disability), or Trauma Insurance. These policies support you if you're unable to work due to a serious illness or injury.

How Much Life Cover Do You Need?

Finding the right amount of cover is a simple balance. Think of it as an equation: What your family will need minus what they already have.

What your family would need:

Clear the deck: Paying off the mortgage, credit cards, and any other loans.

Daily life: Covering groceries, bills, and transport for the next several years.

Future goals: Funding childcare, school fees, or university.

Immediate costs: Managing funeral expenses and legal fees.

What they would receive:

Financial assets: Your current super balance, personal savings, and investments.

Work benefits: Any paid leave or redundancy payouts owed to you.

Support: Financial help from extended family.