There are a number of issues to be aware of before purchasing insurance.

Small premiums often equal small cover

Not all insurance is made equal.  Much of the life insurance advertised on television or via unsolicited cold calls are completely different products to those we work with .  These 'Direct Insurance' policies are often non-renewable, not underwritten and the provider retains the right to change the terms of the policies at their leisure.  This can also be true of some insurance inside superannuation funds that you obtain by default.   With this type of cover, underwriting occurs at time of claim.  This means you can spend years paying premiums for cover that would never have paid you a benefit from the outset.

Premiums are directly related to your sums insured.  Small premiums generally means small cover.  . 

Compare premiums over the long term

What appears to be a cheap premium today may become more expensive in the long run.  Stepped premiums start out cheap, but as these are rated to your age each year, they become far more expensive over time.  The risk with choosing 'stepped' premiums is that they are unaffordable when you need the insurance the most.

Insurance via Industry superannuation funds

Whilst default insurance cover inside your superannuation fund is often cheaper and has automatic low acceptance levels, there are some issues to consider:

  • If you change employment or super fund, you may automatically lose this cover as it is not owned by you.
  • Restrictions apply on age, certain occupations, part-time or casual work, and maternity leave.
  • Sums insured are not tailored to your needs and can be grossly inadequate to meet the needs of the average Australian family.
  • Nominating a beneficiary who is not a dependant.  In this case your insurance payout may be taxable, or the trustee of your super fund may override your choice of beneficiary. 

Of course, if you are self employed or run your own self-managed super fund (SMSF) you will need to ensure that insurance is part of your succession planning.

Terminal Illness Benefit

Check the terminal illness section of your life insurance policy.  Does the insurer offer early payment of your benefit if you are diagnosed with a terminal illness.  This simple definition could significantly improve your quality of life and ease the burden of medical and other costs in the twilight of your life. 

Contact us

This is not a comprehensive list of concerns.  To properly navigate the pitfalls of selecting cover that will protect you and your family's financial security and ensuring your get value for money cover, contact Cornerstone Insurance.  Our advice is impartial, individualised and expert.