How life insurance works in Australia is you pay premium $30 to $80 per month for $500K to $1M cover, and if you die or are diagnosed terminal illness with 12 months to live, insurer pays lump sum $500K to $1M to beneficiaries tax-free, with cover inside superannuation or outside. Life insurance, also called term life, works by you applying with health questionnaire, insurer underwrites based on age, smoking, health and occupation, and issues policy with sum insured $500K to $1M, premium $30 to $80 per month for 30 to 40-year-old non-smoker via TAL, AIA, Zurich, with premium increasing with age. If you die, beneficiaries like spouse and kids claim with death certificate and get $500K to $1M lump sum tax-free within 14 days, used to pay mortgage $500K, living costs $50K per year and kids education $20K per year. Inside superannuation, life insurance automatic with default $100K to $200K for $20 to $40 per month deducted from super, with less underwriting but lower cover and tax on payout may apply if to non-dependent. Outside super, personal life insurance higher cover $1M and tax-free to any beneficiary. For example, 35-year-old male $750K cover $50 per month, dies, wife gets $750K tax-free. So life insurance works by paying $30 to $80 per month for $500K to $1M cover, and if you die or terminal illness, insurer pays lump sum $500K to $1M tax-free to beneficiaries to cover mortgage and living costs.
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