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Planning • 3 min read

What is Life Insurance and how does it work?

Need to know the basics of Life Insurance? We've broken down the common questions for you, learn everything you need to know.

Life Insurance is a way for you to provide for your loved ones, should you die before them. It protects the people who depend on you to look after them.

A beginner’s guide to Life Insurance

If you die prematurely, Life Insurance provides a tax-free payout to your dependants. This money can be used to replace income from your salary, or cover expenses such as funeral and legal costs, childcare and housekeeping. This is why it could be a good idea for both you and your partner to have Life Insurance.

It may not be a purchase that your loved ones will benefit from right now, but they will feel the difference if something happened to you. By taking the time to understand the benefits of Life Insurance, you can plan to protect your family from life’s unexpected turns.

The right time for Life Insurance

Many people decide to get Life Insurance as soon as they have someone who is depending on them, or a debt that could not be repaid upon their death—such as a home loan. Insuranceline Life Insurance is there for you every step of the way, and its flexible Life Events feature means you could increase your insurance cover once every 12 months to line up with major life events, like buying a home or having a baby, ensuring that you and your family are protected whatever your circumstances. 

Assessing your eligibility

Before you apply for Life Insurance, you must be eligible. In most cases this means you must be aged between 18-65 and an Australian resident.

Customising your Life Insurance policy

We are all different, with unique lifestyles, needs and responsibilities, which is why many insurers offer a range of product options. Choosing the right cover for you and your loved ones means that they can continue to have the same financial stability you shared together.

  • Life Insurance pays lump sum to your estate or beneficiaries upon your death. Insuranceline offers a tax-free payout of between $100,000 and $1.5 million depending on your chosen level of cover.
  • Cancer Cover can pay up to $250,000 if you’re diagnosed with certain types of cancer. This payment can be used for anything, including making up lost income, covering medical expenses, required assistance, or even a recuperative holiday.
  • Major Illness Cover, also known as Trauma or Critical Illness Insurance, pays a lump sum if you suffer a major illness such as a heart attack, stroke, and some forms of cancer. You can use this money to support yourself and your family while you recover from your illness, thereby avoiding the pain of financial hardship during an already stressful time.
  • Accidental Death Insurance delivers a tax-free payout to your beneficiaries of up to $400,000 if you’re in a fatal accident.

Generally, you will also be able to add optional extras to your policy—such as Insuranceline’s optional cover against serious illnesses. These extras give you more control over your policy and more options when it comes to your cover.

Find out more about Major Illness and Cancer Cover available to you. 

Applying for Life Insurance

To find out more about the cover Insuranceline offers, and for advice on which type and level of cover would best suit your circumstances, call one of our Insurance Specialists today on 13 77 87, or read through the Product Disclosure Statement for all the information you need. 

With any Life Insurance policy, terms and conditions apply. 


Backed by TAL

^Insuranceline Win 1 of 5 $1000 Visa Cards (Competition). Subject to the Terms and Conditions, the Promotor is offering customers a chance to win one of five Digital Visa Gift Cards valued at $1,000, in one of the four draws. Entry commences on the 1st of April 2024 and will run for four months until 11:59pm AEST on the 31st of July 2024 (Entry Period). During the Entry Period, to be eligible to participate in the Competition, customers must get a quote and take out a new Insuranceline Life Insurance, Income Protection Insurance, or Funeral Insurance policy to enter the Competition. A maximum of one (1) entry into the Competition will be awarded per eligible policy. The Promotion is not open to existing customers, or customers who have cancelled a Promoter branded policy in the 12 months prior to the commencement of the Entry Period and then taken out a new Insuranceline branded policy. Each of the four Prize Draws will take place at Level 16, 1 Denison Street, North Sydney NSW 2060 on the respective Prize Draw and Time, as listed in the table in Condition 13 (and if any Redraws if there are any unclaimed prizes, Condition 19) of the full Terms and Conditions, and the winners will be sent an email and will be attempted to be notified via phone within two (2) business days of the Draw and published on Max. retail value of the total prize pool is $20,000. To be eligible at time of the draw, customers must still have an active policy and have paid 1 month of premiums in full. View eligibility criteria and full terms and conditions here. Promoter: TAL Direct Pty Limited ABN 39 084 666 017 AFSL 243260. Permits: NSW NTP/09255, ACT TP24/00483, & SA Licence No. T24/388.

**Bonus 10% more cover is calculated on the fifth anniversary from the Policy Commencement Date. Each adult life insured will have an extra 10% of the average Funeral Insurance Cover amount held during the previous five years added to their Funeral Insurance benefit. Terms and conditions apply. Refer to the PDS for more information.

#Claims paid figures relate to all Insuranceline life insurance policies in the 2021 financial reporting year (1 April2021 to 31 March 2022). All claims on Insuranceline policies are assessed against the relevant policy terms and conditions. These terms and conditions, as well an explanation of the claims process, can be found in the applicable Product Disclosure Statement. Claims are administered and settled by the insurer, TAL Life Limited.

***Insuranceline is the longest standing provider of Funeral Insurance in Australia, based on: Strategic Insight, Actuaries & Researchers. Funeral Insurance means a policy with periodic premium payments that provides a lump sum to help pay for funeral and associated expenses when you die and excludes pre-paid Funeral Plans and Funeral Bonds.

The information provided on this website is general advice only which means it does not take into account your individual needs, objectives or financial situation. For this reason, you should consider whether it is appropriate for you, and before you decide to buy or to continue to hold an insurance product, you must read the relevant Combined Product Disclosure Statement (PDS) and the Financial Services Guide (FSG). The PDS/FSG contains important information which will help you understand the product, including what's covered and what's not covered and to decide whether it is appropriate for you. The Target Market Determination (TMD) for the relevant product, where applicable, is also available.

If you are considering cancelling a policy you already hold in order to replace it with a new policy, make sure you read the terms and conditions of both policies before you make a decision. The cover terms may be different, you may lose benefits accrued under your existing policy, and waiting periods may apply to the new policy. Changes in your personal circumstances (such as your age, health, and employment) that have occurred since your existing policy was originally taken out may also affect your new policy. As your application for a new policy may not be accepted, and some policies may be unable to be reinstated after they have been cancelled, you should consider waiting until your new policy is confirmed before you cancel any existing cover.

Promoted by Insuranceline, a trading name of TAL Direct Pty Limited (of Level 16, 363 George Street, Sydney NSW 2000) ABN 39 084 666 017 AFSL 243260. TAL Life Limited ABN 70 050 109 450 AFSL 237848 issues the life insurance benefits. St Andrew's Insurance (Australia) Pty Ltd ABN 89 075 044 656 AFSL 239649 issues the Involuntary Unemployment Cover.

The ways in which Insuranceline collects, uses, discloses and secures your personal information are set out in the Insuranceline Privacy Policy, which is available free of charge on request.