Life cover can provide a lump sum when the insured person dies or meets a covered terminal-illness definition. The amount, eligibility and payment conditions depend on the policy. It is separate from income protection, trauma and total and permanent disability cover.
The distinction that matters
A family needs to understand who owns the policy, who is insured and how beneficiaries are nominated. Cover inside superannuation also involves the fund’s rules and payment process; it should not be treated as identical to a personally held policy.
What to check
- Estimate debts, dependants’ expenses and existing resources.
- Check existing cover through super before adding or cancelling policies.
- Compare exclusions, underwriting and premium structure.
- Review ownership, beneficiaries and changes in circumstances.
Example to discuss
A parent comparing cover considers the mortgage, childcare and household work as well as salary. The appropriate benefit cannot be determined by applying the same salary multiple to every family.
This is a hypothetical comparison, not a customer claim or a determination of cover.
Sources and further reading
General information only. The policy, schedule and applicable rules determine the actual position. For a personal decision, use an appropriately qualified adviser or the relevant provider.