Life insurance is on most people’s list of things to do – right after “have wisdom teeth pulled” and “check crawl space under house”. While it’s never going to be fun – it doesn’t have to be altogether painful by following these do’s and don’ts.




-Discuss with partner and family


-Check what life insurance you have through your super


-Shop around: You can do this yourself online, or through a broker. If using a professional, ensure the broker you choose has many life insurance companies on their panel, and has access to all the major companies


-Be honest: Providing misinformation could jeopardize your claim amount. When discussing your health history, be sure to discuss your hobbies and sporting activities


-Read the fine print: Make sure you read and fully understand the product disclosure statement which describes the product, its benefits and limitation, as well as fees and charges


-Ensure the product is inflation-indexed so cover keeps up with cost of living


-Take your medical exam in the morning before you do any other physical exercise that day or face work stress: This will give you best result and lower your premiums




-Wait too long


-Fail to update policy: Update your policy every few years or whenever there’s been a major life event such as marriage, divorce, babies or death of a beneficiary


-Focus solely the highest income earner 


-Choose the wrong policy: Check for restrictions for age, dangerous jobs, part-time or casual work and maternity leave


-Under insure your family: What’s the point of giving your family a sum of $10,000 when you die? It won’t pay off the mortgage or put your kids through university. If you can afford more, go for it. A good rule of thumb is to purchase a policy that is equal to at least 20-25 times your annual salary.


-Try to save on cost by getting a limited package. Instead go for a policy with a shorter term


-Let your policy lapse inadvertently: If your premium is being taken out electronically every month from your bank account, ensure you update your banking details when switching accounts


-Buy insurance that does not require a medical exam: It can be three times the price and not worth it if you are healthy.


-Forget about cover offered by employer: This can amount to three or four times the annual salary. By including this in your calculations you can ensure you don’t end up paying for more life insurance than is required.