When Should I Buy Term Life Insurance?

Term life insurance offers a few advantages over other types of life insurance. Some term policies are much easier to apply for as you don’t need to go through any intrusive medical exams or long forms. In the case of Seniors Term Life Insurance, all you need to do is answer is eight questions about your health to apply for cover.

Seniors Term Life Insurance can be a great option for those who only need cover for a limited time in their life. Whether you’re going through unexpected concerns as you get older or have just made large financial commitments which you need to meet, taking out term life insurance means you won’t have to worry about your financial plans being interrupted during the most unpredictable stage in your life.

Term life insurance for older Australians

Some insurers offer term life insurance designed exclusively for those aged 45 and over, with benefits that can become more important as you age. Request a quote for Seniors Term Life Insurance to choose your cover level and find out about cost.

A term life insurance policy offers many great benefits for those of us who are taking on life’s late challenges, such as retirement or downsizing. There’s no denying that we may be at risk of certain setbacks that we probably didn’t have to worry about when we were 25. For example – if you have adult children, they may still need a helping hand in becoming financially independent.

Term life insurance in Australia

It’s important to do your research and choose an insurer that offers the best possible value for your personal needs and goals.

Direct term life insurance

Direct term life insurance is a type of life insurance policy that you can purchase for yourself directly with an insurance brand, such as Australian Seniors. This means you don’t need to go through any third-party agents or brokers. Although direct life insurance is very common in Australia, it’s a good idea to understand the differences or overlaps term life insurance has with other types of policies, such as group life insurance, or purchasing insurance through a broker.

Read more about direct life insurance >

Group life insurance

Group life insurance is a type of cover that you receive from your employer or superannuation fund, where several people are insured under a single contract. Your employer or union usually purchases a policy on your behalf and includes the cover as part of your remuneration.

Many Australians already have some form of group life insurance built into their superannuation, although it’s important to remember that this cover is not tailored to your specific circumstances. If you feel that you need more cover, you can take out a direct policy based on your individual needs and financial plans.

Young people especially tend to put off thinking about when to get life insurance. However, the younger and healthier you are when purchasing life insurance, the more money you'll save. Life insurance rates vary in cost as you get older, but the price typically increases. As we age, we're at increased risk of developing underlying health conditions, which can result in higher mortality rates and higher life insurance rates. You’ll typically pay less for term life insurance at age 20 than if you wait until age 40. Waiting until age 60 usually means an even bigger increase in price.

Life insurance in your 20s and 30s

At this stage in your life, you may be putting off picking up life insurance in favor of paying off student loans, saving to buy a home, or starting a family. However, for each year you wait, you'll likely pay more in life insurance premiums. Another benefit of having a life insurance policy at this age is that it can be used to pay off debts owed by your estate.

Adults under 30 may prefer a term life insurance policy due to the lower premium costs. At younger ages, income may be scarce. Opting for an affordable policy is better than owning no policy at all. Look for a policy that can cover funeral costs as well as any outstanding debt. A good rule of thumb is to find a policy worth five to 10 times your income, but if you have no significant debt, two to three times your income plus funeral expenses will likely be sufficient.

Life insurance for people over 50

If you're over 50 but in excellent health, getting life insurance shouldn't be an issue. However, if you're a smoker or have any medical concerns, you can expect to pay a higher premium. And if you're looking for life insurance over 60, term life insurance is your best option, as the premium will be lower and remain consistent throughout the policy's term.

Life insurance for married couples

Without life insurance, your spouse may be responsible for your debt if you pass away. To ensure your family is provided for in the future, it's recommended to get life insurance coverage that's 10 to 12 times your annual salary.

What type of policy is right for me based on my age?

Under 30 years old: For most young people, a term life policy is a popular option because it's more affordable. However, as you age and are able to spend more on insurance premiums, a whole life policy allows you to purchase higher coverage amounts for a set price that won't increase. Whole life policies become more expensive as you age, so the younger you are at the time of purchase, the more affordable it will be over the span of your life.

30 to 60 years old: Whole or universal life policies can be good options, depending on your financial situation. If you carry a large amount of debt, you may opt for a high-value term life insurance policy until the debt is paid off. If you don't need a large amount of coverage, a mid-range universal life policy is a good investment due to its ability to grow over time.

Over 65 years old: For seniors with little to no debt who wish to save money, final expense coverage is an affordable option that often has no medical exam requirement. It covers the cost of funeral and burial expenses without placing a financial burden on the family.

What policy length should I consider?

Deciding which term length is best for you will depend on your age and certain life events such as having children, buying a home, or starting a business. The length of most term insurance policies is typically 10, 20, or 30 years, although many companies offer options in five-year increments as well.

How to get life insurance

Compare life insurance quotes online with Progressive Life by eFinancial or call 1-866-912-2477.

The best type of life insurance for you will always depend on your own personal needs, and you may find that some policies are more suitable than others based on your life stage and family’s financial plans.

If you are wanting cover during a certain period in your life – such as your working years while you are raising children or paying off a mortgage, then term life insurance may meet your needs. If you expect that your family will need cover for a longer period, especially as you get older and are worried about funeral costs or final expenses dipping into savings, then a full life insurance policy may meet your needs. This type of cover remains for whole of life, which means the policy will never expire as long as you keep paying your premiums (or don’t cancel or make a claim).

Full life insurance policies may also come with optional insurance covers such as for Total and Permanent Disability or Serious Illnesses1. These can help cover the costs of treatment and rehabilitation, and to financially support yourself and your family if you suffered a lifelong health setback. If you want to cover your family for even more events, especially as you get older, then a full life insurance policy with these benefits may suit you better.

Before taking out life insurance, it’s recommended that you check any existing life cover that you have (such as through your super1), don’t cancel any existing cover until your new application is accepted, check any accrued benefits, the possibility of waiting periods starting again and always read the PDS.

Why consider term life insurance?

With term life insurance you can take out cover at many different age groups, including over the age of 45. Here’s how term life insurance can help based on your family or living situation:

Couples

The next years are likely to be your most unpredictable ones as you move in with your partner and make plans to build up your wealth. Term life insurance can help keep your household plans on track in case you passed away or suffered a terminal illness during this time. You may also consider a term life insurance policy to top-up any existing cover that you may have, particularly to reflect any additional needs of your partner.

Young families

Put a safety net in place for your family, especially during your children’s important early years. A fixed year term life insurance policy could cover you for most of your mortgage repayment period. You may also consider a term life insurance policy to top-up any existing cover that you may have, particularly to reflect any additional needs of your partner.

Established families

With a grown up family, term life insurance can also help take care of their evolving needs. If you were no longer around they won’t be impacted by final expenses such as funeral costs or debts if you pass away during the term of the policy.

Seniors

You’ve worked hard for decades and deserve to live without financial worries. A term life policy can cover you during your early retirement years, when you no longer have an income to rely on, helping your family cover funeral costs, outstanding debt or relocation/downsizing if you passed away during that time. Or, in case you became terminally ill, you can use the money to pay for palliative care.

Read more about term life insurance benefits