# Aussie life insurance?



## Ato (1 November 2009)

I was wondering if anyone has any info on life insurance in Oz. I'm looking for comments on rough costs per month for plans and how much they pay out, and of course what type of plans they are? I'm trying to compare to what I can find here in Japan. Thus far it seems Japan is damned expensive for very little return.

Anyway, if anyone has some rough info they're willing to post, I'd appreciate it.

(Please note I'm not looking for advice on which plans to get, either in Oz or Japan. I simply would like to look at some rough figures.)


----------



## Macquack (1 November 2009)

Self-insure and cut out the middle man.


----------



## Krusty the Klown (2 November 2009)

With life cover, you nominate the amount you want to be insured for and the premium is calculated from that and your age, sex, health etc.

Your cheapest option would be inside of any Australian held super funds if you have any.

They are much cheaper than retail providers as they negotiate group cover.

The only downside to this is that a payout is made to your super fund not your beneficiary, and is distributed by the trustee, not according to your will.


----------



## Ato (3 November 2009)

Cheers Krusty. I dont have access to Super funds in Oz, so am stuck with retailers. Need to do some more study into policies here in Nippon.


----------



## gooner (3 November 2009)

Ato said:


> I was wondering if anyone has any info on life insurance in Oz. I'm looking for comments on rough costs per month for plans and how much they pay out, and of course what type of plans they are? I'm trying to compare to what I can find here in Japan. Thus far it seems Japan is damned expensive for very little return.
> 
> Anyway, if anyone has some rough info they're willing to post, I'd appreciate it.
> 
> (Please note I'm not looking for advice on which plans to get, either in Oz or Japan. I simply would like to look at some rough figures.)




OK

I've got about $700k of cover. $90 a month for a 46 year old, white collar, non smoking male. Stepped so as I get older, they keep increasing the premium on me


----------



## Ato (3 November 2009)

gooner said:


> OK
> 
> I've got about $700k of cover. $90 a month for a 46 year old, white collar, non smoking male. Stepped so as I get older, they keep increasing the premium on me




Cheers Gooner. That sounds pretty impressive. If I may ask (and ofc if you feel like responding), when does the contract itself end? For example, once you reach the age of 60, if you havent passed away (sorry morbid) then you effectively lose the money you've been paying in?

The reason I ask is that I'm having trouble understanding how the insurance companies can offer such cheap coverages with such high payouts. Everyone dies, so if the policies lasted till death then wouldnt the insurance companies go broke paying everyone out? As an example, if I was to enter a policy that paid out $700k and cost even $200 every month from now till let's say the age of 65, I'd only pay $72k. So my family would get 10 times what I'd paid in on the event of my death. Surely the insurance companies cant afford that, as they'd have to pay for everyone as everyone dies.

The brief look I've had at insurance companies here in Japan seem to indicate basic policies around about $100k for $100-150 per month. There are probably quite a few different ones though.


----------



## Krusty the Klown (3 November 2009)

Ato, life cover from any insurer ends automatically at age 65.

The traditional purpose of life cover is to replace income lost due to the early cessation of your working life.

You might have issues getting cover from an Aussie insurer if you live in Japan permanently.

Premiums paid are non-refundable.


----------



## Macquack (3 November 2009)

Krusty the Klown said:


> Your cheapest option would be inside of any Australian held super funds if you have any.
> 
> They are much cheaper than retail providers as they negotiate group cover.
> 
> The only downside to this is that a payout is made to your super fund not your beneficiary, and is distributed by the trustee, *not according to your will*.




Krusty, I dont get this. Could you elaborate, please?


----------



## Ato (3 November 2009)

Krusty the Klown said:


> Ato, life cover from any insurer ends automatically at age 65.
> 
> The traditional purpose of life cover is to replace income lost due to the early cessation of your working life.
> 
> ...




Ah goodo, thanks again Krusty.

Yeah, I very much doubt I'll get coverage from an Oz company. I was more interested to see the comparisons between the two countries so I could lament if Oz had better policies (or secretly sn1gger if Japan had the better ones   ).


----------



## gooner (3 November 2009)

Ato said:


> Cheers Gooner. That sounds pretty impressive. If I may ask (and ofc if you feel like responding), when does the contract itself end? For example, once you reach the age of 60, if you havent passed away (sorry morbid) then you effectively lose the money you've been paying in?
> 
> The reason I ask is that I'm having trouble understanding how the insurance companies can offer such cheap coverages with such high payouts. Everyone dies, so if the policies lasted till death then wouldnt the insurance companies go broke paying everyone out? As an example, if I was to enter a policy that paid out $700k and cost even $200 every month from now till let's say the age of 65, I'd only pay $72k. So my family would get 10 times what I'd paid in on the event of my death. Surely the insurance companies cant afford that, as they'd have to pay for everyone as everyone dies.
> 
> The brief look I've had at insurance companies here in Japan seem to indicate basic policies around about $100k for $100-150 per month. There are probably quite a few different ones though.




My policy expires in 2063 on my 100th birthday, assuming I reach that far (just checked the documentation). However, by then I will have voluntarily stopped paying the premium, The reason is that as a, say 70 year old, your chance of dying in the next year is say 1 in 10. Therefore the premium on my $700,000 policy will become $70,000 a year ($700,000 divided by 10) plus a profit margin for the insurer. So I will be paying $100,000 a year in premiums.  This is what I meant when I said the premiums were stepped - the insurers increase the premium for the risk of dying. The older you get, the higher the premium. Insurance companies are not in loss making business Basically, in Australia, life insurance is just like house insurance - premium changes each year and gets higher if the risk is higher - for life insurance as you get older, for house insurance if you move to a crappy suburb.

There are other types of policy (but not in AUS) where the premium is fixed, but you pay a much higher amount. Not sure whether these ones stop at a certain age. This might be the type of policy that you get in Japan. With these the company can invest the higher premiums received for future payouts.

So you need to understand the difference between the policies in Aus and Japan - could be comparing apples and oranges.

BTW, what are you doing in Japan? My wife is Japanese, but I have never lived in Japan, only visited.


----------



## Ato (3 November 2009)

Ah lol, that's quite the cost in your waning years gooner!

Yeah, in Japan one of the types is a fixed but higher premium. Also the payout doesnt seem to be anywhere near as high with these.

I'm a public school teacher by day (been here over a decade). Visiting is the way to go at the moment, frankly I wouldnt recommend living here; the economy is terrible, and decent, sustainable long term work is very hard to find.


----------



## gooner (3 November 2009)

Ato said:


> Ah lol, that's quite the cost in your waning years gooner!
> 
> Yeah, in Japan one of the types is a fixed but higher premium. Also the payout doesnt seem to be anywhere near as high with these.
> 
> I'm a public school teacher by day (been here over a decade). Visiting is the way to go at the moment, frankly I wouldnt recommend living here; the economy is terrible, and decent, sustainable long term work is very hard to find.




The higher premiums and lower amount is because the company know you will keep paying (as premium is fixed) and not drop out and that they will have to pay out. So your total contribution plus the earnings they get on it will more than cover the payout to you (obviously across all customers).  

No plans on moving to Japan - we love the Aussie lifestyle too much.


----------



## Krusty the Klown (6 November 2009)

Macquack said:


> Krusty, I dont get this. Could you elaborate, please?




The actual superfund pays the premiums, even though it is from the balance of your account, so they own the policy, not you.

If a claim is made it is paid in to your super fund, not to your estate.

Any money inside super is governed by the _SIS Act_ (Superannuation Industry Supervision Act). 

This legislation states that super moneys are not automatically paid to your estate on death, distribution is decided on by the trustee of the super fund. So the payout can be contrary to your wishes and your will.

You can nominate a beneficiary for your super fund, but the trustee does not have to act on it if they find reason not to. Reasons can be someone contesting the will, estranged family members, dependants left out of the will, particularly where you have a legal obligation to pay child support but have not been doing so, etc, etc.

There is such a thing as a binding nomination as a beneficiary, which has to be updated every three years with the fund. Usually the trustee will payout to this nomination, but again they do not have to by law.


----------



## Garpal Gumnut (6 November 2009)

With the wide safety net available in Australia paying any type of insurance is totally and utterly unnecessary.

It is a waste of money unless tax deductible.

gg


----------



## gav (6 November 2009)

Garpal Gumnut said:


> With the wide safety net available in Australia paying any type of insurance is totally and utterly unnecessary.
> 
> It is a waste of money unless tax deductible.
> 
> gg




Which is why I have Income Protection insurance (tax deductible)


----------



## Paul Woodward (4 June 2013)

Ato said:


> I was wondering if anyone has any info on life insurance in Oz. I'm looking for comments on rough costs per month for plans and how much they pay out, and of course what type of plans they are? I'm trying to compare to what I can find here in Japan. Thus far it seems Japan is damned expensive for very little return.
> 
> Anyway, if anyone has some rough info they're willing to post, I'd appreciate it.
> 
> (Please note I'm not looking for advice on which plans to get, either in Oz or Japan. I simply would like to look at some rough figures.)




When it comes to life insurance, the life insurance companies take into account different factors such as age, sex, occupation, whether you are a smoker or not etc... Each insurance company will target different occupations and so there could be quite a difference between the amount you pay.


----------

