Most Australians are familiar with life insurance and understand why it must be considered. But how many of them know the eligibility criteria that affect life insurance in Australia and why they might be denied coverage? Assuredly, it is a smaller number, so in this article, we will address those criteria and any other pertinent aspects to be aware of before purchasing a policy.
Factors that affect an individual’s eligibility for life insurance in Australia
It may seem so obvious that it requires no mention, but life insurance in Australia is not automatically available to everybody simply because they decide they want it. There are some essential restrictions to be aware of and other factors that affect premium levels and claims. The most significant eligibility criteria include:
- Health record — Any applicant’s general health is considered, but the more restrictive aspects focus on any pre-existing conditions and hereditary ailments. Although it is not often demanded, your chosen insurer may request a health check before signing off on your life insurance in Australia, especially if serious issues are prevalent or run in the family. These must all be declared during the application process to avoid automatic nullification and, in some cases, may be grounds for refusal of coverage.
- Age limits — Individuals below 18 are ineligible for life insurance in Australia, as are those above 73.
- Permanent residency or citizenship — life insurance in Australia may only be purchased by official residents and naturalised citizens.
- Hazardous occupations – Life insurance in Australia is complicated if you work in what insurers consider a ‘high-risk’ industry. Providers vary in what those are, and some can be unexpected, so be sure to ask. While these occupations may not wholly rule you out of insurance, they may result in harsher terms and higher premiums.
Grounds for denial of claims against life insurance in Australia
It is, of course, in the best interests of any insurance company to find legitimate reasons to deny claims, and it is your responsibility to prevent them from doing so. The following are some standard reasons why any claim might be dismissed, but there are others, and you must pay close attention to them before taking out life insurance in Australia:
- Self-harm and suicide – If the cause of any policyholder’s death is by their own hand or as a direct result of an intentional act of self-harm, then any insurance provider will view that as grounds for denial of a claim against life insurance in Australia.
- Misrepresentation – Any inaccurate or deliberately withheld information pertinent to the policy will cause the providers to dismiss a claim. Ensuring accurate and up-to-date information is crucial when applying for life insurance in Australia. Take nothing for granted, check your statements repeatedly, and never neglect to inform them if circumstances change.
Life insurance in Australia is more challenging to access than people think, but it remains an excellent way to protect your loved ones if things go wrong and you expire before your time. Give the application your undivided attention, and don’t be afraid to ask questions and clarify any points you do not fully understand.