Can I get Whole Life Insurance in Australia?
Whole Life Insurance is no longer available in Australia. Whole of life insurance was regarded as Australia’s number-one investment choice until 1991, before Superannuation Funds changed the focus from saving for your death (Whole Life) to save for your retirement (Term Life). Term Life replaced this policy type due to all the problems with whole life insurance.
Take note, whole of life insurance is an expensive cover option and generally, more than a decade will pass before you’ll see signs of a reasonable investment return. Besides this, these returns are not always guaranteed; you might even lose the money you have invested.
Term Life Insurance
Term Life Insurance, also known as life cover or death cover is one of the most popular personal insurance policies available in Australia. Term Life policies generally pay out a lump sum benefit upon your death or when being diagnosed with a terminal illness. Although it does not offer an investment or cash-back option, it is significantly cheaper than a whole life policy. Most term policies will usually expire at a specific term, set your insurer, for example, your age 99. However, if you are still alive after the end of your policy term, you can either renew your policy or switch to a permanent policy. Alternatively, can even choose to have the full coverage amount payout and use it for:
- Clearing any outstanding debts e.g. car loans, mortgage, or credit cards.
- Any large future expenses e.g. that overseas trip you’ve been planning for years or your daughter’s wedding.
- Future investments to secure a comfortable retirement.
Difference between term and whole life insurance
Should you buy term or whole life insurance?
Whether you should buy a term or whole life insurance policy depends on your needs. However, only Term Life Insurance is available in Australia. Offering customers a less complex, more affordable policy with the opportunity to extend their term or in some cases even re-invest some of the capital. Buying a Term Life Policy provides protection for your loved ones’. Compare your Term Life Insurance options so you can get a policy suited to your requirements and budget.