Taking out a life insurance policy can be a great way of helping to financially safeguard your family’s future, but with so much choice out there it can be difficult to figure out what’s true and what’s misinformation.
In this article, we break down some of the most common life insurance myths in Australia and look at what's really going on. With clearer information, you can decide what fits your situation and decide how you'd like to help your loved ones enjoy a brighter tomorrow.
Life insurance through super is enough
Cover through super can be a helpful starting point, but it's often too small or too generic for many people's needs.
Most Australians who have insurance through super get what's called "default cover". You're signed up automatically, often without health questions. That's convenient, but the level of cover is set for a broad group of members, not your family’s needs.
Default amounts can be quite low compared to what you might actually need when you’re looking for financial support for things like mortgage repayments, outstanding debts and protecting against future living costs. Cover might reduce automatically as you get older or stop when you move funds or stop contributions. A separate policy in your own name gives you more control over how much is paid out, who receives it and how long the cover lasts. With Golden Life Insurance, you can receive up to $250,000 life insurance benefit paid to your loved ones, depending on your age when you apply.1
Life insurance is too expensive
Life cover can feel expensive, especially with cost-of-living pressures, but the real cost varies a lot from person to person.
Premiums are usually based on things like your age, the amount of cover you choose, whether you smoke, your health and your job. You decide how much your benefit will be, and you’ll know exactly how much you need to pay each month. After each year, your benefit amount and premiums will automatically increase by 3%. This can help protect against rising costs of living. If you’d simply prefer to pay the same each month, you can also choose to opt-out or change your benefit amount at any time.
Golden Life Insurance you choose a lump sum that could help give your loved ones a brighter tomorrow by covering the mortgage, debts or everyday bills. Simply choose a benefit amount that works for your budget and pay fortnightly or monthly at no extra cost. With 100% early payout for terminal illness2 and a straightforward claims process, you can have some peace of mind that the ones you love will be supported financially.
Only breadwinners need life insurance
This myth focuses on income and ignores the huge value of unpaid work in the home.
In many families, one partner does more paid work while the other does more unpaid work. Things like childcare, cooking, cleaning, and organising require time and dedication. Research has shown that unpaid care work in Australia is valued at hundreds of billions of dollars a year.
If the person doing that unpaid work passed away, the surviving partner might need to pay for extra childcare, home-help, or cut back on their own work hours. Those can be real financial pressures. A policy that pays a lump sum can give the family more options at a very difficult time.
I'm too young
Serious illness and accidents are more common in older age, but they can affect younger adults too.
There are benefits to applying while you're younger and healthy because cover is often easier to get and generally cheaper than applying later. That doesn’t mean age alone should be a reason to rule it out. If you already have a partner, children, a mortgage or joint debts, it's worth understanding how a policy could fit into your plans. With Golden Life Insurance, Australian residents aged 40 to 80 can apply for cover in minutes over the phone with no medical exams or blood tests needed.
I can't get life insurance as a smoker
When you apply for cover, you're typically asked whether you smoke. Insurers use your smoker status, along with other health and lifestyle information, to assess risk and set premiums. It’s a myth that smokers in Australia can’t get life insurance cover. Depending on the insurer, smokers can usually still apply for cover, but they may pay higher premiums than non-smokers.
It's only for people who want to leave an inheritance
A payout can help create an inheritance, but that's only one possible use.
In practice, many families use a payout to clear or reduce a mortgage, pay off personal loans or credit cards, or give a surviving partner breathing space to adjust work and caring arrangements.
The lump sum could also help with immediate costs like funeral expenses or it could be used to ease some pressure by paying off outstanding debts. Whatever the reason, with a Golden Life Insurance policy in place, you're covered from day one for death and terminal illness,2 so you can get on and enjoy life. Learn more about the benefits of life insurance if you’d like to decide if it’s right for you.
I don't have any dependants, so I don't need it
This myth is sometimes true, but it’s not the whole story. If no one relies on your income or unpaid work, you may feel less need for a large policy. Even so, there are a few things to think about.
One is the cost of your own funeral. Our Funeral Costs Report showed that even cremations, which are often assumed to be cheaper than a burial, can cost as much as $15,000. When taking into account all the elements required for a burial, total costs can stretch as high as $23,000. Without any cover or savings, those costs may fall on relatives or friends.
Some people without dependants still choose a modest amount of cover so there's enough to pay for a funeral and clear any small debts. It comes down to your own finances and wishes.
I can't get it because I have a health condition
This myth is often false. Those with a health condition may naturally be worried of the condition affecting their application, but it doesn't automatically mean you can't get cover whatsoever.
When you apply, insurers usually ask about your medical history. They may offer standard cover, or they may offer cover with special terms, such as higher premiums or exclusions. People who have had cancer can sometimes get life cover but may find other types of insurance harder to obtain or may face higher premiums.
Golden Life Insurance is designed to provide a simple application process. As long as you’re an Australian resident aged 40-80, you can apply. We don’t need any medical exams or bloods tests, and there are no complicated forms to fill in. Simply answer a few health and lifestyle questions, and you're all set. If you’d like to learn more from our Australian-based team of specialists, simply call 1800 299 351 or get a quick quote.
Claims are not paid
Industry data shows that nearly all claims made are paid here in Australia.
In the rare event of claim being declined, it often involves things where the policy:
- Doesn’t actually cover the event
- Non-disclosure of important health information at application
- The policy having already lapsed.
This means that as long as you keep up with premiums and ensure you’re honest on your application, you have nothing to worry about.
With Golden Life Insurance, the claims process is designed to be simple, with our team of Australian-based claims specialists on hand to help your loved ones when they need it.
You need to take a medical to get it
This myth is often not true. Some insurers require medical tests, but many don't.
For many policies, the first step is an application form with health and lifestyle questions. Depending on your answers, the insurer might then ask for more information or tests. In Australia, you're not required to have a genetic test to apply for life cover. The insurer can ask about your health and test results you already have, but they can't force you to take genetic tests.
With Golden Insurance, the process is straightforward. There's no medical exams or blood tests needed, we just ask some simple health and lifestyle questions. Many people can arrange everything in minutes and receive immediate cover from day one.1
Stay-at-home parents don't need it
Stay-at-home parents often provide a huge amount of unpaid work that would be costly and stressful to replace.
Many stay-at-home parents provide ongoing, unpaid care for children and run the household day to day. If a stay-at-home parent passed away, the surviving partner might have to pay for full-time childcare, home help, or cut back work hours to manage school runs and activities.
The economic value of that work can be very high, even if there's no salary attached to it. A policy can give the family a financial buffer and help provide a brighter tomorrow for everyone.
I already get it through my superannuation
Many people do have some cover inside their super, but this isn’t the same as the lifelong peace of mind a standalone life insurance policy can provide.
A separate policy like Golden Life Insurance sits alongside any super-based cover you have. With it, you can receive a 100% early pay out of your life insurance benefit amount if you are diagnosed with a Terminal Illness. This can help with covering medical expenses or spending time with loved ones.2
Make your golden years shine
These life insurance myths exist for a reason. They often contain a grain of truth, but they can also hide important details that matter for real families. Once you understand the benefits of life insurance and its limits, it becomes easier to see where it might fit.
If you’d like to help give your loved ones a brighter a tomorrow, simply give our Australian-based team of Life Insurance specialists a call. Whether you want to get your cover in place, or if you simply have questions, we’d be delighted to help. give us a call on 1800 417 667 and you can arrange everything over the phone in minutes.