Family Life Insurance

Need life insurance for your family? Compare through Savvy and consider cover options for your partner and children.

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, updated on July 19th, 2023       

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Life Insurance

We’ve partnered with Compare Club to bring you a range of life insurance policies to help you compare them side by side.

Buying life insurance is one of the biggest decisions you can make as a family, so it’s important to take the time to consider the vast range of options available while shopping around for a policy for your collective needs. You can do just that through Savvy.

Comparing life insurance policies with us, you can weigh up different offers from a panel of some of Australia’s top life insurance companies. You can consider the benefits, inclusions and exclusions and the price of your premiums to help you find the most suitable deal among our panel’s offers. Get quotes and start comparing them through Savvy today.

What is family life insurance and how does it work?

Family life insurance in itself isn’t a product you can buy in Australia, with policies typically tailored to the needs of a single policyholder. However, there are policies which you may be able to purchase which can be more tailored to the needs of a family. For instance, some insurers may offer the ability to buy a joint policy for you and your partner, while others can enable you to add protection for your children in the form of an optional policy rider.

However, in most cases, life insurance comes with a single life insured, which you can adjust to meet your family’s financial requirements if you pass away. You can do this by working out a suitable lump sum insured which can be paid to your beneficiaries (such as your partner and/or children) in the event of your death or terminal illness diagnosis.

The way life insurance works is straightforward. By taking out a life insurance policy and keeping up with premium payments, either annual or monthly, your insurance company agrees to pay a set amount to you or your beneficiaries if a covered incident takes place.

What types of life insurance can I purchase for the whole family?

Generally speaking, you’ll have a few options to choose from if you’re looking for a life insurance policy to offer cover or financial security for your family. These will usually include:

  • Term life insurance: also known as life cover, this type of policy can cover you for between ten to 30 years and enables your beneficiaries to receive a lump sum of money if you pass away due to a covered event or are diagnosed with a covered terminal illness. In most cases, coverage starts at $100,000 and can increase from there, taking into account affordability and what your family requires after your death.
  • Trauma insurance: if you become seriously ill or suffer a serious injury, trauma insurance can help you and your loved ones cover the costs of your recovery and other expenses with a lump sum payment. Covered injuries and illnesses will depend on your insurer, but some may include cancer, heart disease or severe head trauma. Trauma insurance can reach up to $2 million worth of coverage.
  • Income protection insurance: being unable to receive a regular income due to illness or injury can place a strain on a family’s finances. Income protection insurance can cover you for up to 70% of your regular wages on an ongoing basis (subject to your insurer’s terms and conditions) to help your family stay on top of important payments such as rent, a mortgage and school until you’re well enough to get back to work.
  • Total and permanent disability (TPD) insurance: this type of cover can pay out a lump sum if you become permanently disabled and are unable to return to work. This is either in the form of Own Occupation cover (unable to return to your current position, but able to continue working in a similar role) or Any Occupation cover (unable to return to any position relevant to your experience, education and training). You may be able to insure yourself for as much as $3 million to $5 million.

What should I consider when taking out family life insurance in Australia?

It’s best to consider a range of factors before comparing life insurance deals through Savvy. Some of the areas to consider include:

Your family’s needs

Work out how much your family would need to live on if you or your partner were to pass away or become incapacitated and leave the household without that person’s income. Make sure you consider things such as outstanding debt, ongoing costs such as childcare and schooling, any savings or superannuation you have which can be drawn upon and the cost of a funeral if someone were to pass away. This can help you avoid over-insuring yourself and your family and paying more than you need to for coverage.

Benefit limits

Different life insurance policies come with varying maximum benefit limits, so comparing through Savvy can help you find a suitable option for your family from our selection of insurance partners. It’s important to look for a policy with an insurer who can provide you the most appropriate protection available to you and your loved ones.

What’s included and what isn’t

Reading through your life insurance policy’s Product Disclosure Statement (PDS) allows you to understand the policy’s inclusions and exclusions. Some of the features regularly included in policies include inflation-proofing, overseas coverage and advance payments. However, they can differ between providers, which is why it pays to compare. On the other hand, insurers usually have general exclusions including alcohol or drug-related claims, suicide within the first 13 months of the policy and travel to dangerous countries, which are worth knowing about before buying your policy.

How many children are covered

It can be important to find out how many children can be covered under policies if you’re thinking of growing your family. Looking for a policy that gives you some breathing room to add more children on as they arrive can give you peace of mind your clan can be covered, no matter how many of you there are. Some life insurance providers may allow you to add up to ten children to your policy for an added premium.

Type of premium

You’ll want to consider whether the price of your premium is stepped or level, as this will play a role in determining how much you pay over the life of your policy. Stepped premiums increase as you grow older, starting out cheaper and becoming more expensive as you age, while level premiums remain consistent throughout your policy and only rise with inflation. This means that while stepped premiums are often the more affordable option when you’re younger, level premiums typically work out to be cheaper when you’re older.  

Pre-existing medical conditions

If you have a pre-existing medical condition, it’s important to look for policies which may be able to cover it. Rules around pre-existing conditions vary depending on who you buy with and the nature of your condition, so it’s worth checking out before you buy. Some providers may offer cover for a higher premium, while others may not cover the condition at all.

Types of life insurance

Why compare life insurance through Savvy?

Pros and cons of family life insurance

PROS

Peace of mind

Taking out life insurance for you and your family can be a real weight off your mind. You’re reassured that you can be covered by insurance (subject to eligibility, terms and conditions) if you or another family member falls ill or passes away.

Can cover a range of costs

You may be able to use your life insurance payout to cover a wide range of costs, from funeral expenses to outstanding debts and even school fees, fuel and groceries.

Discounted costs

In some cases, insurers may provide you with a discount if you purchase a shared life insurance policy or two policies at the same time (one for each partner), making it cheaper overall. 

CONS

Potentially expensive

Taking out insurance for multiple family members can be costly, especially if you have several children and a growing family.

Lifestyle choices impact what you pay

If you’re a smoker or regularly take part in some risky activities such as skydiving or rally car driving, you can expect to pay more for your policy.

Blanket coverage 

As is the case with any policy, there’ll be a list of exclusions and exceptions to your coverage, so it’s important to be across these when purchasing your life insurance.

Frequently asked questions about family life insurance in Australia

How do I make a claim on my family life insurance?

Claim processes differ depending on the type of incident you’re claiming for and who you choose to purchase with. For example, if you’re claiming for a life-changing injury, your insurer will want you to produce hospital and medical reports to back up your claim. However, if a loved one is claiming for your death, they’ll need to produce a death certificate.

If you’re making a claim for lost income due to a serious illness or injury, you’ll need to give your insurer copies of your payslips and a description of your condition to get your claim processed. In most cases, it can take anywhere from two weeks to several months to have your claim processed and approved, depending on the insurer and the complexity of the claim.

Can I buy life insurance for another family member?

You can buy a life insurance policy for another family member, whether that’s a parent, partner or spouse or someone else. You’ll need to get their written permission before you buy the policy in their name and show an insurer their death or incapacitation would cause you financial distress, which is known as insurable interest.

How much does a family life insurance policy cost?

There’s no universal, one-size-fits-all cost when it comes to family life insurance because how much you pay is determined by a set of variables. Some of these include:

  • Your age
  • The number of people insured (such as the number of children protected under child cover)
  • The type of coverage you choose
  • Your health and any family history of illness
  • Your job
  • Your choice of stepped or level premiums
Can I claim my family life insurance premiums as a tax benefit?

In most cases, life insurance premiums aren’t claimable as a tax deduction. However, if you’re buying income protection insurance, you can typically claim the premiums as a tax deduction on your return if you hold this insurance outside of your super fund. If you’re unsure about what you can and can’t claim, it’s important to speak to a financial professional.

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Disclaimer:

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.