Who can I nominate as a beneficiary?

In a general insurance contract, you can nominate anyone to be a beneficiary. As this is a contract it falls outside your Will meaning the nomination cannot be contested and will be paid to the person/s nominated. If the cover is in superannuation you will need to be a dependant, meaning a spouse or child or a financial dependant. If you nominate anyone else the nomination will be deemed invalid. A binding death benefit nomination can also be used in superannuation.

How much will insurance cost me?

Insurance premiums depend on a number of factors including: age, sex, occupation, current health and previous health issues, hobbies, whether you opt for stepped or level premiums. In addition to this income insurance will also consider other factors including, waiting periods, claims indexation, advanced covers or basic covers. Insurance can also be paid monthly or yearly.

How long will the policy go for?

Insurance policies will run in most cases until you stop paying the premium or at the expiry of the policy. Income policies generally stop at age 65 or 70 years of age. Life insurance can continue well past that age, in fact they can continue to age 99 years however the premiums become significantly more expensive.

Do my beneficiaries have to pay tax when the benefit is paid out?

Generally, tax is not payable on the payout of a life insurance policy. If the policy is held within superannuation, a payout to a dependant spouse or financial dependant is tax free a payout to a non-financial dependant attracts tax at 30% plus Medicare.

I have a pre-existing illness; will I be eligible to take out an insurance policy.

Under your duty of disclosure, you are required to disclose of any pre-existing illness or condition. The insurance company will assess, potentially write to the doctor for a report and then make a decision on the cover. They may accept at standard rates, accept with a loading, accept with an exclusion or decline.

I work in a high-risk job; will I be eligible to take out an insurance policy?

Insurance companies rate occupations differently. Office workers pay lower premiums, higher risk occupations will pay higher premiums and/or have limitations placed on their cover.