Introducing the inaugural Money Life Insurance Awards
Money magazine, with its research partners Rainmaker Information and Plan For Life, brings you the inaugural standalone life insurance awards, which aim to recognise the best offerings in the sector.
While they are newly independent, some of these awards have long been part of Money's stable of well-recognised industry awards.
Insurance can be a tricky arrangement. While it is intended to eliminate or reduce the mental toll in times of need, it also forces you to think of, and plan for, the unexpected, with different types of insurance cover available - such as life/death, total permanent disability (TPD), income protection (IP), trauma and funeral.
How to compare life insurance policies
Understanding what these insurance options cover and mean can be complicated. Some are straightforward, others are more nuanced. What is and isn't covered may vary from insurer to insurer.
The key is to read the fine print.
It is impossible to know exactly how much cover is enough, and there are certain factors to be considered, such as age, occupation, annual income and lifestyle.
For instance, the cover amount should be at least able to fund all your financial liabilities (if any) such as mortgage, car loan and personal loan, plus a good buffer to fund you or your dependants' day-to-day expenses for a period of time.
How we chose the winners
According to data from the regulator APRA, there were 28.5 million insurance policies as of June 2024.
About 75% were issued via a super fund, 10 % were directly issued to consumers and 12% were bought through an adviser (and 3% were ordinary group policies).
We have divided our awards to reflect these preferences.
Insurance via super funds
The easiest way to access death, TPD and IP insurance is through your super fund. While death and TPD insurance is offered by default for members older than 25 years and with a minimum balance of $6000, members younger than 25 can opt in.
The beauty of default insurance offered through super is that it is cost effective, as it is a group policy issued to the fund. Premiums are deducted from members' super contributions, and for default insurance no underwriting is required.
If a member wants higher cover than the default insurance, they can apply to their fund.
To find out the best insurance offers in group super, Rainmaker analysed more than 11,000 death/TPD and IP insurance offerings from super funds.
The winners - which includes the super fund and its insurers - were ranked based on the best premium value, taking into account all risk types, occupational groups, age groups and waiting/benefit payment periods for various categories.
Direct insurance
To establish the best value direct insurance, Plan For Life analysed more than 25 products offered by eight issuers covering death, TPD, trauma, IP and funeral insurance.
The best pricing for each benefit type was determined by considering various age groups, sums insured/monthly benefits and occupation classes.
The winners of the best-value product under each award category were determined by the lowest price combined with the best product features, recognising the importance of value for money when selecting life insurance products.
Insurance via a financial adviser
To find the award winners for the advised category, Plan For Life benchmarked life insurance products covering death, TPD, trauma and IP issued by 10 life companies.
The benchmarking factors include financial strength, market performance, adviser service quality, product features, premium ranks and lapse rates. Premium ranks were determined by analysing pricing across various age groups, sums insured/monthly benefits and occupation classes.
The overall winners for Life Insurer of the Year - Advised and Direct were determined by benchmarking financial strength, market performance, adviser service quality/online experience, product features and premium ranks.
Order your copy of the April issue of Money including the Life Insurance Awards!
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