Life Insurance

Each individual can tailor a life insurance policy to suit their needs. For an insurer to accept your application for cover, they must be satisfied that your health and lifestyle fit within acceptable boundaries.

As such, an insurer will generally take into account a range of personal and lifestyle attributes when considering your application, including your age, height, weight, medical history, occupation, family health history and smoking status.

If you have pre-existing health issues when you apply for cover, you may need to pay a higher premium rate than normal (known as a ‘premium loading’). The life insurance company may need to charge this loading in order to cover the additional risk. Alternatively, the life company may apply an exclusion on your policy in relation to that pre-existing health issue.

In addition, some lifestyle choices may affect your life insurance cover, including:

• High risk occupations such as working in the oil or gas, transport or fishing industries.
• Engaging in hazardous sports such as parachuting, mountaineering and motor sports.

For more information, you should review the relevant Product Disclosure Statement (PDS).

However, life insurance is not limited to healthy, risk-averse people. Even those who have survived a serious illness, such as cancer or a heart attack, may still be eligible for life insurance cover.

Before accepting cover, the insurer will usually consider the type of illness or disease and its stage of development. For example, some cancers are considered more aggressive – or more treatable – than others, so an insurer would typically request a full medical report and examination to determine how far the cancer has progressed and whether it’s likely to return.

Often, the insurance company will want to wait at least a couple of years after the applicant has been given the ‘all clear’ before accepting the policy, and it may attract a premium loading due to the higher risk.

The real question is - can you afford not to have life insurance?

If you were to die now, could your family continue to live in the family home, maintain their lifestyle and achieve their financial goals? Ultimately, not having life insurance could cost you and your family more than you think.

Fortunately, most people are surprised to learn that life insurance can be cheaper than they think.

And the benefits of life insurance far outweigh the cost, as you or your family can use the proceeds of an insurance payout to help:

• Pay off the mortgage
• Meet ongoing household expenses
• Fund medical treatment or rehabilitation costs
• Pay for school and university fees
• Pay for extra child care or home services
• Cover the cost of funeral expenses.

If cost is an issue for you, it’s good to know that heightened competition means there is now a range of affordable life insurance options, many of which you can apply for and purchase online.

Get started with an online Life Insurance quote. This is usually a simple process that involves entering a few personal details, such as your age, gender, occupation and smoking status, and then submitting your request to the insurer.

With little fuss, you’ll soon find a level of life insurance that will help meet your needs and protect your family’s future.

Most super funds offer at least a basic level of life insurance, as well as income protection and Total Permanent Disability (TPD) insurance to protect members and their families from the financial hardship of death or a terminal illness.

The level of cover and types of insurance provided through your super are limited. Payments are also sometimes delayed after you’ve made a claim, and coverage ends after you reach a certain age (usually 65 or 70). Read more about the pros and cons about using the life insurance included with your super fund at Money Smart.

Life insurance provides valuable financial protection for your loved ones, giving you the peace of mind to live life to the full. Consider what your family would do if you were no longer able to support them - could they keep up with the home loan and the cost of education, utilities or healthcare? Life insurance will support your loved ones with a lump sum in case of your death or terminal illness.

In Australia, premiums on life insurance in case of death are not generally tax deductible.

Legally, you can take out multiple life insurance policies in Australia. In fact, many people have more than one policy since they hold some life insurance through their superannuation fund. Every policy offers different benefits. If you are looking into an additional life insurance policy, it is worth checking with your current insurer to figure out if this could affect your current policy.

There is no waiting period on AAMI life insurance in case of death, unless your cause of death is suicide or intentional self-harm. There are waiting periods on some of the optional extras, including cancer, heart attack and stroke, which cannot be claimed against Optional Illness Cover if they arise within 90 days of taking out the policy.

When you apply for any type of insurance you have a duty to disclose any information relevant to your policy, including existing health conditions. If you are aged between 18-65 and would like to make an application for simple cover, there are usually no further medical tests required. Applications for other types of cover may require further tests in order to be approved.

Typically, life insurance does not provide cover for any pre-existing conditions. There are a number of options for insurance cover that will pay out should you develop a serious condition such as cancer in the future.

Because of the way premiums are calculated, it’s important we understand the health conditions and needs of every Life Insurance applicant. With AAMI Life Insurance, you are not required to go to the doctors or get any medical tests. You will be required to answer a number of Health and Lifestyle questions as part of the application, but this should be a quick and easy process without the need to consult a doctor.

You may be worried about the potential of your Life Insurance application being rejected as a result of the answers you provide, but it’s important you don’t omit or hide information. If you do, you may end up not being able to receive payment for a claim you make down the track, when you might have been fully eligible for cover if you’d been up front in the first place.  

We’re sorry you’re thinking of cancelling. For policy cancellations or to discuss your situation further and to consider your options, please call the AAMI Life Team on 13 22 44.

If you do cancel, you may qualify for a refund for the unexpired portion of the premium less our cancellation fee and any non-refundable government charges (if applicable).

The Life Insurance Code of Practice is a series of mandatory customer service standards that all life insurers need to comply with. These standards cover sales and marketing practices, underwriting and claims and are designed to protect you.

AAMI Life Insurance policies are issued by TAL, who played a key role in creating the Life Insurance Code of Practice. AAMI Life is committed to delivering the best possible customer service standards. AAMI Life will continue to look for ways to raise the standards of customer service now and over the years to come. Read more

Life cover with AAMI will come at a set expiry date, usually at age 99.

There is no perfect time to get life insurance, but many people will review their insurance needs when they go through a major life change like getting married, having children, changing jobs or moving house. Often the younger you are, the less expensive your premiums will be, since you are less likely to have any pre-existing medical conditions. AAMI’s policies are designed to suit you whatever life stage you are at.

Life insurance will cover death by suicide, but only after a specific waiting period has passed. AAMI life insurance will cover death by suicide or intentional self-harm, but only after 13 months has passed since the purchase of the cover.

Life insurance is paid out in a lump sum to your beneficiaries in case of your death or diagnosis with a terminal illness. There are few circumstances when life insurance will not pay out, and this is typically when there has been a lapse in cover, cover has expired or you have died in circumstances that are not covered - such as travelling overseas to a country on DFAT’s do not travel list.

Term life insurance generally cannot be ‘cashed in’ but if you hold on to a whole life policy then it may come with a surrender value. These policies are no longer available in Australia.