Frequently Asked Questions
You need to check the relevant legislation in your State and Territory, as the rules are different in each jurisdiction.
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What is life insurance?
- Life insurance is a policy that a person may take out to protect their families in the event of their death.
- It is also known as life cover, term insurance or death cover.
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What is TPD?
- Total or Permanent Disability cover or TPD is an additional insurance option available with a life insurance policy.
- It provides a benefit if the life insured suffers total or permanent disability
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What is meant by total and permanent disability?
- All companies have their own definition of total and permanent disability. This will be stated in the Product Disclosure Statement.
- Generally it means either the life insured:
- cannot work again in any occupation; or
- cannot work in their usual occupation; or
- has suffered a loss of limbs or sight; or
- has suffered the loss of independent existence.
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What is a policy?
- A policy is a binding legal contract that lists details about your insurance cover.
- It is very important to read the policy documents and understand its contents. You can use our free and anonymous Ask a Lawyer service if you have a particular issue you want to know more about.
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What is a Product Disclosure Statement?
- A Product Disclosure Statement is a document that lists:
- the benefits and risks associated with the insurance policy;
- the cost of the insurance; and
- the fees and charges such as:
- exit fees; and
- annual increases in fees.
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What is the Policy Schedule?
- A policy schedule gives an outline of the cover including:
- details of the type of cover including the sum insured and any limits and exclusions;
- details of the policy holder including the policy number;
- details of the life insured;
- how much the premiums are;
- additional clauses; and
- the policy commencement date.
- It is the most important document and must be kept in a safe place.
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Who may apply for life insurance?
- Generally Australian residents and Australian citizens aged between 18-64 years may apply for life insurance.
- Some companies allow life insurance policy holders to take out children’s insurance as an additional cover under the main policy.
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What is an insurance premium?
- An insurance premium is the amount of money that a policy holder must pay to the insurance company for the policy.
- It is usually paid monthly and the amount of premium depends on individual policies and the amount being insured.
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What is the sum insured?
- The sum insured is the maximum amount of money a policy holder can claim if a life insured person:
- dies;
- is diagnosed with a terminal illness; or
- is diagnosed as suffering with TDP if they have additional TPD insurance cover.
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What is a cooling off period?
- Insurance policies come with a cooling off period. This gives you a certain number of days after the date the policy commences to consider the policy documents and ensure that the cover meets your individual needs. This period is usually 30 days.
- During this time it is advisable for policy holders to get legal advice to clarify any rights and obligations that are imposed under the policy. You can use our LegalPlan™ membership to ask lawyers for a Fixed Fee Quote in relation to your personal insurance needs.
- If you want to cancel the policy you may do so within the cooling off period by giving the insurance company notice.
- Most companies do not enforce a written cancellation requirement and may accept cancellation over the phone. You should check the policy documents to see what the company’s policy is regarding cancellation.
- Generally a full refund will be processed upon cancellation of the policy.
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Who is the insured person?
- An insured person is the person who is listed on the policy schedule as the person whose life is insured under the policy. This person is often referred to as the ‘life insured.’
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Who is the policy owner?
- A policy owner is the person who is listed under the policy schedule as the owner of the policy.
- The policy owner is the person who pays the policy premiums and he or she does not have to be the life insured.
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What is meant by terminal illness?
- Terminal illness is an illness where life expectancy is 12 months or less.
- An official diagnosis from a medical practitioner will be needed to prove you are suffering from a terminal illness and the insurance company may request you to attend additional appointments with a medical specialist that they nominate.
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What is Total and Permanent Disability (TPD)?
- All policy holders should check their individual policy’s product disclosure statement as the definition of TPD may vary. Generally it means the life insured:
- has suffered a loss of limbs or sight;
- is unable to work; or
- cannot independently exist.
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What is meant by ‘loss of independent existence’?
- Under a TPD insurance policy the definition of ‘loss of independent existence’ may differ and it is therefore important to check your individual product disclosure statement.
- Generally it includes permanently losing the ability to independently carry out daily activities such as:
- dressing;
- eating;
- mobility; and
- maintaining personal hygiene.
- You can use our Phone a Lawyer service for a preliminary legal consultation if you think you may need legal advice.
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View more Information on TPD & Life Insurance