Difference between full life insurance and term life insurance

Life insurance depending on your life stage

The best type of life insurance for you will always depend on your own personal needs, and you may find that some policies are more suitable than others based on your life stage and family’s financial plans.

If you are wanting cover during a certain period in your life – such as your working years while you are raising children or paying off a mortgage, then term life insurance may meet your needs. If you expect that your family will need cover for a longer period, especially as you get older and are worried about funeral costs or final expenses dipping into savings, then a full life insurance policy may meet your needs. This type of cover remains for your entire life, which means the policy will never expire as long as you keep paying your premiums, or don’t cancel the policy or make a claim.

Full life insurance policies may also come with optional cover such as Total & Permanent Disability Insurance and Serious Illness Insurance or Children’s Insurance. These can help cover the costs of treatment and rehabilitation, and to financially support yourself and your family from the unexpected. If you want to cover your family for even more events, especially as you get older, then a full life insurance policy with these benefits may suit you better.

Before taking out life insurance, it’s recommended that you check any existing life cover that you have, such as through your super¹, don’t cancel any existing cover until your new application is accepted, check any accrued benefits, the possibility of waiting periods starting again and always read the PDS.