We’ve all heard people say that ‘life is short’ to help us focus on living in each moment and not allowing ourselves to get bogged down with stress and mundanity. There is much wisdom in this; however, many underestimate the psychological strain that worrying about the future can bring. Although it is not limited to individuals with dependants, the burden of responsibility is exacerbated in those with families to support. 

As much as the process of researching and purchasing life insurance might feel like a burden in itself, few actions can relieve that underlying stress of the unknown more effectively. Knowing we have done everything possible to secure the finances of our loved ones in the event of a devastating diagnosis or accident brings a palpable sense of relief. This article examines life insurance and how modern technology has revolutionised the industry, shifting some power to the consumer and making informed decisions more straightforward. 

Do I really need life insurance?

The first step to determining whether we need life insurance in Australia involves altering how we view it as an entity. Some people view it as a morbid acceptance of mortality rather than the powerful financial tool it is. Dwelling on a subject we have been trained to avoid is unpleasant and makes putting it off easier. However, we underestimate the sense of accomplishment and security that will pervade our thoughts once we have handled the issue. Although we will address the reasons why almost anybody can consider life insurance, there are some individuals for whom it should be non-negotiable, namely:

• Primary income providers 

In families or other relationships with a disparity between the income providers, or where one person provides it all, the others rely on them financially. If the worst happens and no life insurance policy protects those left behind, the world is turned upside down at a time when bereavement is already a horrendous burden. Affording existing debt payments and maintaining a tolerable standard of living can suddenly become a serious challenge. With a well-researched, comprehensive life insurance policy in place, this aspect is taken out of the equation entirely. 

• Non-working parents or spouses

Although many families now have two working adults providing income, there is still a significant number where one partner remains at home, especially when young children are involved. Domestic tasks and childcare are crucial roles that avoid the cost of outside assistance. However, if the stay-at-home partner is tragically stricken down, those costs now come into play. Life insurance provides ample cover for this and illustrates why not only income providers should consider taking out a policy.

• Guardians with financial dependents

Our legal responsibilities towards our offspring and other dependents are inextricably linked with our ability to provide financial as well as emotional support.  We are financially bound to provide for our families until they are old enough to do so for themselves, but that is not always the end of the story. As inflation and the cost of housing have soared, many young people cannot meet the requirements of mortgages without parental assistance. 

A comprehensive life insurance policy automatically covers young children and spouses, ensuring they do not suffer adverse financial effects when losing a parent or guardian. But what of those financially independent offspring who may have asked us to co-sign for loans like mortgages? Your shortlisted life insurance policies may also cover co-signed loans and other financial arrangements. 

• Small-business owners 

Many small businesses are unique in their dependence on the founders and owners to be heavily involved in running the company. These businesses are often founded on the back of individual expertise, and the cost of replacing that experience can be more than some companies can manage. Most smaller concerns also rely on financial security and support from the owners that employees cannot be expected to shoulder if a tragedy occurs. Luckily, life insurance can provide much-needed funds for any small business rocked by the sudden loss of an owner or significant contributor.

Employees’ livelihoods are protected, and the remaining parties have financial room to manoeuvre during a frantic period of shock and re-calibration. Any debts the unfortunate individual holds will be honoured, and a smooth ownership transition facilitated as legal expenses are met. This less-common aspect of any life insurance policy requires in-depth clarification and discussion with your chosen provider. It is unlikely to be found in the standard terms and conditions online. 

• Pragmatic, altruistic individuals 

Although the people mentioned thus far have all been included primarily due to their responsibility for others, there is a case to be made for individuals who have no such responsibilities. A life insurance policy covers ‘final costs’ if that person does not want others or the state to be expected to pay. Making arrangements for charitable donations from an existing policy is also possible. The holder can name their favourite charities as beneficiaries if they wish. Alternatively, a charitable giving rider can be put in place to donate an agreed percentage of the policy’s face value. 

Using Technology to Find and Compare Life Insurance Quotes

Our ability to source and compare life insurance quotes took a significant step in the right direction with the advent of comparison sites and the ability to research companies and policies online. Obtaining competitive life insurance now requires little more than a solid internet connection, an appropriate device, and the time and inclination to find the best option. Some tips and strategies to safely navigate your way through the process include: 

• Dedicate as much time and energy as possible to the task

While obtaining life insurance very quickly online is possible, rushing into it and picking the cheapest policy is inadvisable. Although policies will share many features, exclusions, and conditions, there may be substantial differences between them and potential pitfalls you must be aware of. It may not be a concept or process many of us enjoy dwelling on, but fully understanding each policy’s nuances and advantages can never be wrong.

• Choose several well-established, reputable comparison sites

Before comparing policies, spend some time researching comparison sites and highlighting those with a good reputation for providing fair, transparent life insurance quotes. Beware of relying too heavily on comments and reviews, but if there are dozens or even hundreds of negative ones, steer clear and look elsewhere.  

• Examine each policy’s details carefully

One of the major benefits of sites that provide side-by-side comparisons is that it is straightforward to identify differences between policies. Make notes on each policy that interests you and note any attractive features and potential downsides for consideration later. Legislation typically dictates that life insurance policies have clearly stated, concise details, and any relevant caveats and conditions must not be hidden. Work methodically, paying particular attention to cost, stated terms and conditions, restrictions, and exemptions, including:

• Alternative premiums/coverage for high-risk occupations.

• Similar conditions for dangerous activities or pastimes (motorcycling, skiing, outdoor pursuits, etc).

• Age restrictions and the effect of age on premiums. Some policies will increase in price as the holder ages, so check carefully. 

• Attitude towards pre-existing medical conditions. Are they excluded? Is a health check mandatory?

• Financial provisions, steps required, and support in the event of a claim. This may not be mentioned, so you will need to head back to the search engine and investigate. 

Research your shortlisted providers

The life insurance marketplace has flourished and is now more crowded and competitive than ever. There is a good chance you will not recognise some providers, so it’s essential to discover their financial backers and whether they are registered and recognised by government authorities. This can usually be done via a public database. 

Speak to your potential providers directly

Although nothing comes close to the internet for quickly comparing and eliminating large numbers of life insurance policies, a telephone call is recommended once the sharp end of the process is reached. You can discuss any inconsistencies or issues you have highlighted, and you might also be offered additional incentives and discounts to tempt you. You have committed to thoroughly investigating each policy, and simply accepting the first offer you receive defeats the object. Always politely agree to consider any offers and beware of those companies that seem desperate to hook you there and then. Your experience dealing with representatives over the phone might indicate how you can expect to be treated in case of a query or claim. If you do not appreciate the tone or clarity of your conversation, you know what to do. 

Review your findings and finalise your decision

Once you are satisfied that you have done all you can to inform yourself about each shortlisted policy, its provider, and potential shortcomings, it’s time to take a step back and let everything sink in. Return for a final review of your notes and make your choice. 

Final Thoughts About Life Insurance

Predicting the future is a skill none of us is blessed with, but that doesn’t prevent us from doing everything possible to mitigate the adverse effects of unpleasant outcomes. Whether protecting those we love against undue hardship or exercising fiscal responsibility in the event of our passing, purchasing comprehensive life insurance is an astute decision. 

Thanks to the power and convenience of the online world, researching and comparing policies is more straightforward and fuss-free than ever, and there are no excuses not to investigate the subject at least to inform ourselves. Life insurance is generally more affordable than people expect, and the security it provides, both financial for the bereaved and psychological for the policyholder, is worth the expense, effort, and inconvenience.