Simply put, life insurance is a contract between you and your insurer, in which you pay a premium to secure a benefit amount that will be paid out should you pass away. At Direct Cover, we’re dedicated to making life insurance straightforward and helping to protect the life you’ve built. We are here to meet the needs of Australians aged 18-70 who want to keep helping their loved ones financially - even after they’re gone. So, without further ado, let’s cut through the jargon and go through the basics of life insurance.
How does life insurance work?
Life insurance works by providing your loved ones with a cash lump sum when you pass away. This can help provide your loved ones with some financial support during a particularly difficult time. Your benefit amount can be put toward mortgage repayments, bills, funeral costs or any other costs your loved ones may need to cover. When you take out a policy, you choose a benefit amount and pay a fortnightly or monthly premium to keep your policy in place. Your loved ones can then make a claim after you pass away to receive your benefit amount.
How much cover do I need?
Everyone’s needs will be different, but there are a few things you can consider to help you decide on the right cover amount for you. For example, any outstanding debts you might have, and financial obligations such as a mortgage or car repayments. If you are the main breadwinner, you might also think about any income your family would need to replace if you passed away. You could also account for any future plans you may be saving towards, such as education expenses for your children.
With Direct Cover Life Insurance, you can choose a benefit amount starting at $100,000, up to $1.5 million.2 The amount you can apply for will depend on your age at the time of applying. For example:
- Age 18 to 45 – up to $1.5m
- Age 46 to 55 – up to $1m
- Age 56 to 60 – up to $600,000
- Age 61 to 65 – up to $300,000
- Age 66 to 70 – up to $200,000
Before you decide on an amount, keep in mind that your benefit amount will inform your premiums. So, it can be a good idea to ensure that you strike a balance between meeting your family’s needs and securing a premium that you can afford to pay fortnightly or monthly.
How much does it cost?
When you apply for a Direct Cover Life Insurance policy, we’ll go through a couple of things that will determine the starting premium we can offer you. This will include:
- Your age
- Your gender
- Your smoker status
- Your chosen benefit amount
- Your health and lifestyle
With Direct Cover Life Insurance, your premiums will be recalculated based upon your age and your benefit amount each year on the policy anniversary. This means your premiums will generally increase as you get older. This yearly premium change will also reflect the 3% increase to your chosen benefit amount due to the Automatic Benefit Amount Increase feature, designed to help your cover keep up with rising living costs. You can decline this feature by informing us if you don’t want it.
Benefits of life insurance
When you choose Direct Cover Life Insurance, you’ll receive a variety of benefits.
- Cash Payout – Get a life insurance benefit of up to $1.5 million paid2 to your loved ones (depending on your age when you apply)
- Terminal Illness Coverage - Get a 100% early payout of your life insurance benefit amount if you are diagnosed with a Terminal Illness3
- Straightforward Claims - Our claims process is designed to be simple, and our Australian-based claims specialists are on hand to help your loved ones with cover backed by an independent, Australian-owned insurer
- Immediate cover - You're covered from day one for death and terminal illness2
- Easy to apply - Australian residents aged 18-70 can apply with no medical exams, blood tests or complicated forms. Simply answer some health and lifestyle questions, and you're all set. You can arrange everything over the phone
- Lower premiums for non-smokers - If you're a non-smoker you’ll enjoy lower premiums4
- Pay fortnightly or monthly - Pay how it best suits you, choose fortnightly or monthly at no extra cost
- Trust - Our customers can have peace of mind that Direct Cover is part of a global network whose brands have been chosen by over 500,000 customers globally and are rated 'Excellent' by thousands of customers on Trustpilot1
- Exclusive - Direct Cover Life Insurance is backed by an independent, Australian-owned insurer and is exclusive to us. You can't buy it anywhere else
- Free Will Kit - Let them know your final wishes, on us. Receive a Free Will Kit when you take out a policy
Who needs life insurance?
In short, if you have loved ones who might need some financial support if you passed away, life insurance could be a potential solution for you. You might consider whether a policy is right for you if you fall into any of the below categories:
- Parents and caregivers: Many parents purchase life insurance to ensure the financial well-being of their children and partner if they were to pass away. This could help to cover childcare, education, and daily living expenses
- Breadwinners: If you’re the primary earner in your family, life insurance could provide income replacement to maintain your family's standard of living and help them meet financial obligations in your absence
- Homeowners: If you have a mortgage or other ongoing financial commitments, you could benefit from life insurance to ensure these costs are covered should you pass away
- People with dependents: If you have dependents like aging parents or siblings you support, life insurance can provide financial support for their care
- People with specific financial goals: Those with specific financial goals, such as leaving an inheritance, providing for a charitable cause, or covering estate taxes, can benefit from life insurance as part of their estate planning
- Anyone with financial responsibilities: Anyone who has financial responsibilities or wants to provide for their loved ones' financial security can benefit from life insurance
When should I get life insurance?
There’s no right time to take out life insurance, but many people will begin to consider a policy after a big change to their lives, such as getting married, having a child, or buying a house. Generally, the younger you are at the beginning of your policy, the higher the benefit amount available to you. It’s also beneficial as you can secure a lower premium when you’re younger, too.
Am I eligible?
If you’re an Australian resident aged 18 to 70, you’re eligible to apply for Direct Cover Life Insurance. There’s no need for medicals or blood tests. We’ll ask some health and lifestyle questions, and if your application is accepted, you can get covered over the phone.
How are claims made?
When a claim is made, we aim to make things as simple as possible. Your loved ones can get in touch following your passing, and we will help them through the process. If you are diagnosed with a terminal illness, you can also make a claim to receive your benefit amount to put towards your medical expenses or simply to cover day to day life while you spend time with your loved ones.3
To make a claim, just reach out to us on claims@directcover.com.au
Get in touch
We’re dedicated to helping you protect the life you’ve built. If you have any questions or would like to apply, don’t hesitate to get in touch. You can reach our friendly, Australian based team on 1800 583 675, Monday to Friday from 7am-8pm excluding NSW public holidays.