In Australia, 22% of male deaths and 14% of female deaths were people 25-64 years of age.
Australian Institute of Health and Welfare 2002 – Mortality - FAQs
Term life insurance
– sometimes referred to as death insurance – provides a lump sum benefit upon the death of the life insured due to illness or accident. (Please note that some exclusions may apply – for example. one common exclusion is suicide.) Depending on the policy, the insured may also be able to claim if they are diagnosed with a terminal illness.
Why buy term life?
The lump sum provided by a term life policy will provide capital to ensure that the insured’s family and dependants are able to maintain their lifestyle. This may include repaying debts like mortgages or personal loans and paying for ongoing living expenses. The payout may also help with hiring someone to help around the home and help look after the children.
How much cover is required?
To determine a suitable amount of life insurance cover, an in depth analysis of the personal situation and needs of the insured and their family is required. Points to consider include, but are not limited to, mortgages and other loans that would need to be repaid, capital that would be required by family and dependants to maintain their lifestyle, and likely future expenses including the cost of children's education.
If unsure about the right amount of cover, advice from a professional is recommended. It is also recommended that the lump sum insured be reviewed regularly, especially with changing circumstances that may effect whether the term life sum insured continues to be sufficient.
Features and options
Many term life policies allow the insured to add total and permanent disability
and trauma insurance
as an extension to the policy, expanding the range of events that the insured may be able to claim for. It is important to read the product disclosure statement for full details though, as a claim under the total and permanent disability or trauma extension may reduce the term life sum insured.
Taxation of term life insurance
Generally term life insurance premiums paid are not tax deductible, however the lump sum benefit upon death or diagnosis with a terminal illness is generally paid tax free.