What Should You Look for in a Life Insurance Company?
When looking at life insurance policies, it can be tempting to focus on price or choose a familiar provider, but there are always more factors worth considering.
First, look at whether the insurer offers the type of cover you need and whether the policy suits your circumstances. Take a closer look at what’s covered, any exclusions or limitations, and the features and benefits included.
Claims performance can also provide a useful point of comparison. Looking at claims acceptance rates, processing times, and disputes can give you some additional insight into an insurer’s claims experience.
While price matters, it should not be the deciding factor. Instead of asking: “Who is the cheapest?”, a better question is: “Which insurer provides cover right for my circumstances?”
Compare the Cover, Not Just the Company
When looking at insurance, it’s easy to go for a name you recognise. But it’s important to look deeper and understand what you’re getting for your money.
Two life insurance policies can appear very similar but have different definitions, conditions and exclusions and benefits. That’s why it’s worth looking beyond the headline price and comparing the details of your cover. Consider:
- What the policy covers and when a benefit may be paid
- The definitions and conditions that apply
- Any exclusions or limitations
- Optional features or additional benefits
- Any other important terms that could affect your cover
The insurer you choose is important, but the policy itself needs to suit your circumstances. Taking the time to compare the cover can help you understand what you’re paying for and whether it provides the protection you need.
Look at Life Insurance Claims Performance
Claims performance can give policyholders useful insight into how the insurer supports customers when they need to make a claim.
Customers can view things such as claims acceptance rates, which show the proportion of claims an insurer pays, as well as processing times, which can give you an idea of how long claims can take to assess and finalise. Information about complaints and disputes can also offer context.
However, claims data shouldn’t be looked at in isolation. A claim may be declined for a number of reasons, including where it doesn’t meet the definitions or conditions set out in the policy. That’s why it’s important to consider claims performance alongside the actual policy terms.
Looking at this information as part of your broader comparison can give you a better understanding of an insurer’s claims performance and what you may be able to expect if you need to make a claim.
Compare Life Insurance Premiums and Long-Term Costs
While it may be tempting to choose the cheapest option, the lowest premium isn’t always the best fit when selecting the right policy for you.
When looking at premiums, it’s important to understand what you’re actually getting for the price you pay. Consider how much you’ll pay now, how the premium may change over time, as well as what type of premium structure the policy uses.
It’s essential to think about the amount and type of cover you’re paying for. A cheaper policy may have different features, definitions or conditions that impact how the cover works.
Instead of simply looking for the lowest number in a quote, consider value, suitability, and long-term affordability.
Read the PDS Before Choosing a Policy
Before committing to a life insurance policy, it’s a good idea to read the Product Disclosure Statement (PDS). While it can be quite detailed, it contains important information about how the policy works. It can help you understand:
- What is covered and what is not
- The key definitions used in the policy
- Any exclusions or limitations
- How benefits are paid
- Important conditions that apply to your cover
PDS documents can be lengthy and sometimes difficult to understand, especially when you’re comparing several at once, but they can help you look beyond the advertising and headlines. Rather than relying on a policy’s marketing, take a closer look at the PDS before deciding so you understand what you’re buying.
Do You Need Help Comparing Life Insurance Companies?
There’s no single life insurance company that is the best choice for everyone. The right option depends on your circumstances, financial commitments and the level of protection you require.
When comparing insurers, it’s worth looking at the cover, policy terms, claims performance, premiums and long-term affordability rather than simply choosing the cheapest or most familiar brand.
Not sure which life insurance option is right for you? Panorama Financial Services can help you understand your options and compare cover based on what matters most to you. Explore our Life Insurance page or get in touch with the Panorama team to discuss your options.
Frequently asked questions
Explore the answers to some common questions about choosing a Life Insurance policy in Australia.
Look beyond the company name and price. A good insurer should offer cover that suits your needs, with policy terms, definitions and exclusions you’re comfortable with. It can also be helpful to consider the insurer’s financial strength, claims performance and the level of customer support available.
Price is important, but it shouldn’t be the only thing you consider. A cheaper policy may have different features, definitions or conditions than a more expensive option. Instead, look at the value and suitability of the cover, as well as whether the premiums are likely to remain affordable over time.
Start by comparing more than just the premiums. Look at the type and amount of cover, policy definitions, exclusions, claims performance, premium structure and long-term affordability. Reading the PDS for each policy can also help you understand exactly what you’re getting.
Yes. A financial adviser can help you understand your options and compare policies based on your circumstances and protection needs. They can also help you work through differences between policies, so you’re not simply choosing an insurer because it has the lowest premium or is a name you recognise.
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