Life insurance policies usually come with a range of included benefits. Depending on your insurer, you may have the flexibility to add on optional extras to increase your cover or broaden the terms of your policy.
These extras could mean higher premiums for the protections they offer, so it’s important to weigh up the benefits and choose wisely to avoid paying for features you don’t need or are unlikely to claim on.
Optional benefits you could add on to a life insurance policy may include:
Accidental death benefit
With this benefit, an additional lump sum may be paid if the insured dies due to an accident, which could mean the insured’s beneficiary may receive an additional amount. While the amount is usually the same value as the insured amount of the policy, the additional amount can vary.
Waiting period waiver
Some policies have a waiting period before you can receive your benefits. This waiver allows you to skip the waiting period and receive your payout immediately once the claim has been approved.
This is also called bloodborne disease cover and provides you with a lump sum benefit should you contract a bloodborne disease like Hepatitis B or C, or HIV whilst at work in your normal occupation. This is often included in policies for medical professionals.
Cover for children
This allows you to extend your life insurance cover to your children and pays out a lump sum benefit if your child suffers a critical illness meeting the severity criteria in the policy or passes away.
If you are on stepped premiums with your policy, you may be able to choose the premium freeze benefit. With this option, your premiums stay the same, but the benefit amount would reduce at every policy anniversary.
Depending on your policy, at each policy anniversary your benefit amount may increase to cover increases to the cost of living by the greater of the inflation rate or 5%, so your benefit value can keep pace with inflation. This figure may vary depending on your policy, and your premiums will increase accordingly to make this possible, which is why this is an optional benefit.
Every policy is different and it’s important to understand what’s included and what options are available for additional cover. I can help you choose a policy and add-ons to suit your needs and budget, book a time to chat here, so you can rest assured you and your loved ones have cover that meets your expectations.
Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it, you should consider its appropriateness for you, having regard to those factors. Before making any decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement.