Life insurance extra benefits you didn’t know you needed
Did you know that life insurance policies have a bunch of other extra benefits? Depending on your insurer, you can even add on some optional extras to beef up your cover or customise your policy.
Now, these extras might bump up your premiums a bit, but they also provide extra protection or sweeten the terms of your policy. Just remember to choose wisely, so you don't end up paying for stuff you don't need.
Optional benefits you could add on to a life insurance policy may include:
Accidental death benefit
If the insured kicks the bucket in an accident, this benefit kicks in and pays out an extra lump sum. That means the beneficiary could get some extra cash. Usually, the bonus is the same as the insured amount on the policy, but sometimes it can be different.
Waiting period waiver
Some policies have a waiting period before you can receive your benefits. This add-on lets you bypass the wait and get your payout as soon as your claim is approved.
The Waiting Period is basically the time you have to wait after getting sick or injured before you can make a claim. It usually lasts between two weeks and two years.
Needlestick cover
Calling all medical heroes! This one’s especially for you. The needlestick cover is sometimes known as bloodborne disease cover, and it gives you a lump sum payout in case you catch a bloodborne disease like Hepatitis B or C, or HIV while working in your regular job. It's a common feature in insurance policies for medical professionals.
Cover for the little ones
You can also extend your life insurance cover to protect your precious children. If your child experiences a serious illness or even the unthinkable, this cover will provide a lump sum benefit.
Premium freeze
If your policy has stepped premiums, you may be able to choose the premium freeze benefit, which means your premiums won't budge, but the benefit amount will decrease each year. It's a neat way to keep your costs steady while still enjoying some cover.
There are two common types of premium structures available with life insurance policies:
Level Premiums: Level premiums start at a higher rate compared to stepped premiums, but will stay at the same level until the age of 65 or 70, at which point they will switch to a stepped premium.
Stepped Premiums: Stepped premiums start at a lower point and will increase as you get older.
Inflation protection
Keen to keep your benefits in line with the rising costs of living? With inflation protection, your policy can automatically adjust your benefit amount each year to keep up with the inflation rate or increases by 5%. It's an optional extra, but it means your benefits won't fall behind. Just remember, your premiums will go up to make it happen.
Remember, folks, not all policies are cut from the same cloth. You want one that fits you just right. It's crucial to know what's included and what extra options are available for more protection. Have a chat with your financial adviser to find the right policy and add-ons for your needs and budget. This way, you can have peace of mind knowing you and your loved ones are comfortably covered.
Read through the financial product disclosure statement (PDS) from insurers for the other benefits and options available.