Compare life insurance quotes

A life insurance policy is a guarantee on the life of the insured person. When the insured person dies, the insurance policy will give their beneficiaries a specific amount of money. The insured person makes a payment, known as a life insurance premium, usually on a monthly basis for a given period of time.

How do we know which life insurance policy is best for us? There are a few factors to consider like:

The type of life insurance
In Australia there are two main types of insurance offered by insurance companies.

Term life insurance policy
Term life insurance policies pays out to the insured person’s beneficiaries as long as the insured person passes away within the fixed term specified in the term life insurance policy. For example, a 99 year term life insurance policy would pay out only if the insured person passed away within the 99 years specified.

Select term life insurance
This is a type of term life insurance where the fixed term specified is usually only a brief five or ten years. As with the standard term life insurance policy, a 5 year term life insurance policy would pay out only if the insured person passed away within the 5 years.

Amount of life insurance coverage needed
The general guideline is between five and ten times your annual salary. But as stated, this is only a guideline. It's difficult to apply a rule-of-thumb because the amount of life insurance you need depends on factors such as your other sources of income, how many dependents you have, your debts, and your lifestyle.

The life insurance premium
The amount of the life insurance policy premium is usually determined by factors such as the age of the person, their gender, occupation, whether or not they smoke, medical history, along with the amount that is required to be paid out on death.

When choosing life insurance, use the Internet's resources to educate yourself about life insurance basics, find a adviser you trust, then have the policies he or she recommends evaluated by an online comparison insurance quote service or fee-only insurance advisor. The bottom line is that the average person does need life insurance and that cheaper doesn’t always mean better – make sure you shop around!