A life insurance checklist to show you if you are on the right track

Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors
, updated on November 25th, 2021       

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If your life insurance has turned into something that you pay towards to without really understanding what you are paying for then its time for an update. It should be something that you constantly re-evaluate to see if it will provide for your loved ones once you are gone. There are small things that you can check to ensure that your policy is up to date and covers all the people you love.

Are you underinsured?

Rice Warner released data showing that there is currently a $1,811 billion underinsurance gap in Australia. They further showed that a typical middle income Australian family with two children were underinsured by a shortfall of $422,000.

Being underinsured can have a negative impact on the future of your loved ones because they won’t be able to pay off debts, loans, and day to day expenses. Getting adequate life insurance cover by speaking to an accredited insurer will ensure that your family is adequately covered.

However, there is also such a thing as being over insured which can make your other policies void. Therefore, it is important to check your policy to see if it is updated to the level of cover that you need.

Have you disclosed your medical conditions?

Some people might shy away from disclosing all their medical information because of the likelihood of it raising their premiums. However, not doing so or lying about your medical history will not work in your favour as it has the possibility of making your cover void.

This can be problematic for your family when they need to make a claim to cover expenses. It’s important that you list all medical conditions, so your insurer can provide adequate cover.

Update your beneficiary list

Keep your beneficiary list updated to ensure that your loved ones are covered. Even if you do not have children or a spouse you can use it to help another family member. If you do happen to have just started a family, then you should list all your loved ones who need to be covered should anything happen.

Have you calculated properly?

The premiums you pay on your life insurance will differ from person to person depending on the type of lifestyle you wish your loved ones to sustain once you are gone. Getting adequate cover is to evaluate your current lifestyle and calculating the cost of maintaining it.

You can speak to an insurer who will help you evaluate if you have adequate cover or use online life insurance calculators that will give you a rough estimation of how much you need.

Is it time for a change?

If your life insurance premiums outweigh the features and benefits, then it’s time to move on. People assume that the more expensive cover means you are getting the best deal, which is not always the case.

It’s important that you check the features and benefits that come with your life insurance before taking it on. One way you can help yourself find the best deal for you and your family is if you compare policies before deciding.

You can always add or amend your policy to help cater to your needs. Avoid keeping your life insurance policy as something that you have to get off your to do list, but update it to ensure you