LIFE INSURANCE FOR 20 TO 30-YEAR-OLDS

FAQs

WHAT IS THE BEST AGE TO BUY LIFE INSURANCE?

In-depth target market determination determines that the younger you purchase a personal insurance policy the cheaper it will be. Private health cover at a younger age is also more advisable because you’re less likely to suffer from a critical illness or terminal illness.

Additionally, if you are the victim of an accident, you will have the financial support of a lump sum payment from certain policies to ensure one less worry to deal with.

Another benefit of taking out cover when you’re younger is that the life insurance premiums will be more affordable, so ensure that you are calculating life insurance premiums according to your present age when you look for an automatic quote online.

HOW MUCH IS A 20-YEAR TERM LIFE INSURANCE POLICY?

Life, TPD, trauma and income protection premiums are calculated using your age. The younger you take out a policy the cheaper it will be. Other factors such as occupation and gender are also required for an accurate quote.

Use our calculator to find out how much your cover will cost. You can run a personalised quote on life insurance policies to see what you can afford.

Remember that life insurance tax deductible benefits may apply. However, always check with our life insurers to explain the tax benefits of life cover and income protection insurance before making a decision. Also, ensure that you take life insurance costs seriously so that you know you will be able to afford the premiums.

HOW DOES A 20 YEAR LIFE INSURANCE POLICY WORK?

No different to any other policy, whether you are holding it for 2 years or 20 years. Every year you receive a renewal notice which will include the amount that you are covered for and your premium.

You are never locked into a policy for 20 years but regular reviews will keep you updated about your life insurance cost, allowing you to make changes as and when necessary, depending on your changing personal circumstances.

HOW MUCH WILL LIFE INSURANCE PREMIUMS COST?

You can use the calculator to determine how much life insurance premiums will cost you. However, note that the calculator provides a good estimate of costs, but it is necessary to speak to a life insurer when taking out life insurance. A discussion with an expert will determine the cost of your life insurance premiums.

WHAT ABOUT TAX AND LIFE INSURANCE?

Whether life insurance premiums and lump-sum payouts are tax-deductible or whether other insurance products come off your taxable income, are all questions that your insurance adviser will discuss with you.

DO YOU NEED PRIVATE HEALTH INSURANCE IN YOUR 20s AND 30s?

Private health insurance covers you when public health services do not, so it is always advisable to take out private health insurance to protect yourself because few people can predict the future. To avoid financial hardship and provide you with a lump sum benefit to cover other living expenses should you lose your job, it is advisable to take out critical illness cover or an income protection insurance policy.

Because you never know when you’ll need medical treatment or have to meet mortgage repayments after the loss of income due to an unfortunate incident, it is better to plan your financial future today.

An insurance expert will help calculate how much money you will need if your health fails and have to stop working. With this knowledge, you can determine how much life insurance you need and how much you can afford to pay on trauma insurance.

Once you decide on a policy type or several policies, life insurers will recommend you read each policy’s product disclosure statement thoroughly, before signing it.

IS INCOME PROTECTION INSURANCE NECESSARY IN YOUR 20s AND 30s?

When you get to a certain age, you may think of getting married and having children. Before you reach this point, take the time to plan your financial future. Should you lose your job due to total and permanent disability, you will lose your regular income. Or, you may suffer from a serious illness that prevents you from earning a living.

As horrible as it is to think about such disasters at the best time of your life, it is necessary. No matter your personal circumstances, if you have children, you will still need to pay school fees. You will also need a lump sum payment or regular monthly benefits to pay for medical treatment and other living expenses.

Before you write off life insurance or income protection insurance, speak to a registered private health insurer about how much critical illness cover you need. Also, talk with the experts about the level of life insurance or income protection you will need to survive over and above any help you receive from the Australian government.

WHAT ABOUT EXCLUSIONS?

A financial adviser will cover all your insurance policy exclusions. Most life insurance and other insurance products require a medical history. If you’re honest about your past medical history, the adviser will fill you in about specific exclusions in relation to specific policies.

Most policies will, however, exclude self-inflicted injuries, pre-existing medical conditions, suicide, and injuries relating to war and high-risk sports or high-risk jobs. You can discuss all these factors with an insurance expert to check which insurances policies will work for your specific personal circumstances.

HOW DO INSURANCE CLAIMS WORK?

Should you need to make a claim against an existing life insurance policy or for permanent disability tpd insurance, you can speak to your insurance adviser. You will need to undergo a medical check-up for a disability claim or any claim relating to a critical illness. Your insurance adviser will advise on which medical experts to see to complete claim documentation.

Once the medical examinations are complete and have been submitted to the insurance company, they will check that the claim is in line with the trauma cover or recovery insurance. The insurance company will additionally determine whether you can claim against your superannuation fund or another insurance policy.

These claims are also typically subject to a waiting period, which depend on individual and policy terms and conditions.

But once approved, you should receive your lump sum payment within a short period.

WHAT HAPPENS IF YOU DON’T TAKE OUT LIFE INSURANCE BEFORE YOU REACH 30?

The answer to this question is simple. If you don’t take out a life insurance policy or trauma cover before you reach 30, it will be more expensive.

The Australian government and companies that deal with private insurance for health encourage you to avoid this unnecessary expense, which could be as high as 10 per cent more than when you’re 30 and under. This figure can rise to as much as 70 per cent from 65 years and upwards.

START YOUR FINANCIAL PLANNING EARLY

In short, the sooner you begin your financial planning, the more capable you will be of covering living expenses should you be unable to work or suffer from a terminal illness later in life.

How much life insurance you will need or other life insurance products will be necessary to achieve this goal, will depend on your financial situation. How much cover will be appropriate will also be an issue, which a chat with a tal life limited abn can help resolve.