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Expensive and too hard to understand are common opinions about life insurance, which perhaps explains industry statistics that estimate some 50 per cent of Australians have at least $100,000 less life insurance cover than they need.
To find out just how much it costs, Your Money Magazine investigated the current life insurance market and compared the cost of buying direct, through your super fund or through an advisor. Managing editor Jackie Pearson said the findings show it is possible to get decent cover at an affordable price.
“We found that buying through your super is the cheapest way to get life insurance but the cover is usually not comprehensive and may not be what you need,” said Pearson. “Buying direct or through an advisor usually costs a bit more but can come with more benefits.”
Pearson added that consumers should shop around for the best deal regardless of how they buy it. However, she warned budget-conscious consumers not to be fooled by cheap policies that seem too good to be true.
“We’ve all seen the ads promising cover for as little as a few dollars a week but don’t believe them,” said Pearson. “Some of these policies provide little more than very limited accidental death cover and have so many restrictions and exclusions that if the worst happens your family could be left stranded.”
Your Money Magazine’s tips for getting the best life insurance for you include:
• Decide whether or not you need life cover based on your current situation
• Shop around to find the right level of cover at a price you can afford
• Check the terms and conditions – Make sure you know what is and isn’t covered before you sign up
• Quit smoking – The cost of life insurance can be double for smokers compared to non-smokers