Policy

Frequently Asked Questions (FAQs)

We hope you find these FAQs helpful. If there are other questions you have please send them through to info@fsc.org.au and we will address your enquiry and build our FAQ bank.

I am self-employed. Why do I need life insurance?

 

Self-employed people face similar needs to employed people – with a few additional challenges.

Self-employed people may have business partners and guarantors on business loans as well as the standard mortgage and dependents. In addition, many self-employed people may find that they either do not have super or if they do their fund may not provide insurance.

If you are self-employed and using insurance for business purposes, you may also find that premiums can in some circumstances be tax-deductible.

 

Can my partner and I take out a policy together?

Yes, some products allow two people to be insured on one policy. This could be you and your partner or another person.

 

 

Are my premiums guaranteed?

For most Australian policies, premium rates are not guaranteed and may change from time to time. Once your insurance cover is in place, any change will apply to a group (for example all 35-year-olds) rather than to individual policies, regardless of any changes to your health, occupation or pastimes. You will be notified in writing at least thirty days prior to any changes in premiums taking effect. 

 

 

What type of questions will I be asked when I make an application for insurance?

An insurer will ask you some questions about your health, lifestyle, occupation and family medical history to assess your application. 

 

 

Do I need a medical check up or blood test?

This depends on the policy. Some policies offer you an automatic approval of cover up to a certain amount. This means no medical examinations or tests are required when you apply. However, you may be required to disclose any known pre-existing medical conditions.

Other policies will require you to undertake a medical examination or blood test. The results will be used to assess your personal risk factor.

At claim time, an insurer may require additional evidence to assess your claim. This may include obtaining medical evidence or information from your employer, or they may do a full review of your medical records.

 

 

I forgot to tell the insurance company that I had a medical condition before I took out my policy. What should I do?

You should inform your insurance company immediately. They may decide to cancel your policy and renegotiate a new one on different terms.

Under your duty of disclosure, you must disclose all known pre-existing medical conditions so an insurer can better understand your risk profile. If you don't disclose this information, even if it was a mistake, your insurer may knock back any future claims.

 

 

I already have an insurance policy and have just been told by my doctor that I have a serious medical condition. Do I have to tell my insurer? Will they cancel my policy or increase my premiums? 

No. Life Insurance policies are 'guaranteed renewable'. This means that provided you met your duty of disclosure at the beginning of the policy and continue to pay your premiums, an insurer cannot cancel your policy or increase your premiums due to any new medical conditions you develop after you take out the policy.

This is why it makes sense to take out all types of life insurance when you are still young and healthy. 

 

 

Do I need to be working to apply for these types of insurance?

You don't need to be doing paid work to apply for term life insurance or trauma insurance, but you must be in full-time work to take out income protection insurance.

 

 

Am I covered if I travel overseas? 

Once your application is accepted, you are covered 24/7, anywhere in the world.

 

 

I heard that my insurance premiums are tax deductible. Is this true? 

In some cases yes.

If you take out Life Insurance, Total and Permanent Disability Insurance or Income Protection Insurance via your super fund, all premiums are paid from your pre-tax earnings.

 For insurance premiums paid outside of super the following table applies:

  Premiums Benefit

Premiums are tax deductible.

Tax will apply to any benefit payments.

Premiums are not tax deductible.

Tax does not apply to benefit payments.

Premiums are not tax deductible.

Tax does not apply to benefit payments.

Premiums are not tax deductible.

Tax does not apply to benefit payments.

 

Are there any restrictions on what my family or I can spend the claims proceeds on? 

No. Any money received can be used as you or your beneficiaries see fit.

 

 

What should I do if I have a complaint about a life insurance company?

 

If you have an issue with your insurance policies or your relationship with your insurer, the first place to start is to tell your insurer you wish to make a complaint.

If your insurer's internal complaints process does not resolve the problem, the Financial Ombudsman Service provides independent dispute resolution.

The service is free to consumers.

Financial Ombudsman Service: http://www.fos.org.au/resolving-disputes/before-you-lodge-a-dispute/#id=undefined.

 

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