Frequently asked questions
- Can I apply for life insurance?
- What types of life insurance does Budget Direct have?
- Are there things life insurance does not cover?
- What's the maximum amount of insurance I can be covered for?
- Will my cover keep pace with inflation?
- How is the cost of life insurance – the premium – calculated?
- Are there any waiting periods?
- How long am I covered for?
- How often should I review my life insurance?
- Can I change my insurance?
- How does the claims process work?
- How are claims paid?
- If I have been diagnosed with a terminal illness and less than 12 months to live, can I apply for an advance payment of my death benefit?
- Do you offer to pay funeral costs in advance?
- Are life insurance premiums tax deductible?
- Are life insurance payouts free from tax?
- How are premiums paid?
- Can I cancel my policy?
- What’s the difference between trauma insurance and health insurance?
- When it comes to Income Protection Cover, what’s considered to be a ‘serious illness or injury’?
- How much Income Protection Cover do I need?
- Who underwrites Budget Direct life insurance?
DISCLAIMER: The answers to the following questions are general in nature and do not take into consideration your personal circumstances. They should not be viewed as personal advice.
Can I apply for life insurance?
On 28 June 2018, Budget Direct temporarily stopped offering life insurance to new customers.
We apologise for any inconvenience this may have caused you.
Budget Direct will resume offering life insurance to new customers in the near future.
Though we’ve temporarily stopped offering cover to new customers, existing policyholders will continue to be covered.
Also, if you’re an existing Life Cover policyholder and don’t already have TPD, Trauma and/or Children’s cover, you have the option of adding one or more of these covers to your policy. You can do this by calling us on 1800 555 048.
What types of life insurance does Budget Direct have?
We have several types of life insurance, namely:
- Life Cover (and Express Life Cover) – in the event of death or being diagnosed with a terminal illness (where death is likely within 12 months).
- Accidental Death Insurance – in the event you die accidentally.
- Income Protection Cover – in the event you suffer a serious illness or injury and cannot work in your usual occupation.
When you take out Life Cover (but not Express Life Cover), you also have the option – for an additional premium – of adding one or more of the following types of cover to your policy:
- Total and Permanent Disability (TPD) Cover – If, as a result of sickness or injury, you lose your sight or the use of your limbs or are unable to work or cannot live independently.
- Trauma and Trauma Plus Cover – If you suffer from cancer, coronary artery bypass surgery, heart attack or stroke (Trauma) plus another 10 ‘trauma events’ (Trauma Plus).
- Children’s Cover – If your child dies, is diagnosed with a terminal illness (where death is likely within 12 months), or suffers a specified injury or illness.
Terms, conditions, limits and exclusions apply, so always read the product disclosure statement before deciding whether to buy insurance.
Are there things life insurance does not cover?
Yes. There are some situations or circumstances in which we will not pay a life insurance claim – these are called ‘exclusions’.
For example, we will not pay a policyholder’s Life Cover claim if:
- he or she dies or has a terminal illness as a direct or indirect result of a self-inflicted injury within 13 months of their cover commencing
- we have agreed to a term in their policy that specifically excludes the event or condition that led to the claim. This term will be documented in your policy schedule or the product disclosure statement.
For more information about the exclusions that apply to the different types of life insurance, please read the product disclosure statement.
What’s the maximum amount of insurance I can be covered for?
The following table shows you the maximum benefit amount you can be covered for, depending on:
- the type of cover
- your age (next birthday) when the cover starts.
|Age||Life||TPD||Trauma||Trauma Plus||Children’s||Express Life||Accidental Death||Income Protection|
|18-44||$1,000,000||$1,000,000||$500,000||$500,000||$50,000 regardless of age||$300,000 regardless of age||$500,000 regardless of age||Up to 75% of your pre-tax income (capped at $10,000 per month)|
- TPD Cover benefit amount cannot exceed your Life Cover benefit amount. For example, if you were 30 years old and had $750,000 of Life Cover with us, the maximum amount of TPD Cover you could apply for would be $750,000.
- Trauma/Trauma Plus cover benefit amount cannot be more than 50% of your Life Cover benefit amount. For example, if you were 30 years old and had $750,000 of Life Cover with us, the maximum amount of Trauma/Trauma Plus cover you could apply for would be $375,000 (i.e. 50% of $750,000
- If you had Life, TPD Cover and/or Trauma or Trauma Plus cover and you were paid a benefit under your Trauma Cover, your Life Cover benefit amount would be reduced by that amount. For example, if you had $750,000 of Life Cover and were paid $500,000 for a Trauma Cover claim, your Life Cover benefit would be reduced to $250,000 (we would reduce your premium accordingly).
- The benefit amount paid under an Accidental Death Insurance policy would be paid in addition to any Life Cover (or Express Life Cover) benefit amount you held.
Will my cover keep pace with inflation?
Yes. Each policy anniversary we’ll automatically increase the sum you’re insured for (the ‘benefit amount’) by either the increase in the consumer price index over the previous year or five per cent, whichever is the greater amount.
How is the cost of life insurance – the premium – calculated?
The cost of life insurance is calculated according to the likelihood of the policyholder making a claim and how expensive any claim is likely to be.
Calculated at each policy anniversary, the premiums are based on things like your:
- smoking status
- state of health
- amount of cover (the ‘benefit amount’).
Are there any waiting periods?
Yes – there are waiting periods (also known as qualification periods) for:
- Trauma, Trauma Plus and Children’s cover: You can only claim for specified illnesses and injuries that occur or become apparent more than 90 days after your application for cover is accepted.
- Income Protection Cover: Your nominated waiting period of either 30 or 60 days will apply. If, at the end of the waiting period, a doctor confirmed you were still too unwell to return to work, we would begin paying you your benefit monthly in arrears.
How long am I covered for?
After accepting your life insurance application, we’ll send you a policy schedule that sets out the ‘commencement date’ – the date your cover starts.
Provided you pay your premiums, we guarantee to renew your cover each year until your policy ends – regardless of changes in your health, occupation or pastimes.
Your policy ends on the date that the first of the following occurs:
- we pay your claim (Life, TPD or Trauma cover only)
- the benefit amount (the sum you’re insured for) is reduced to nil following the payment of your claim (Life, TPD or Trauma cover only)
- you cancel the policy
- we cancel the policy (where permitted by law)
- you cease to reside in Australia (if on a temporary work visa)
- the policy anniversary after your:
- 100th birthday (Life Cover and Express Life Cover)
- 75th birthday (Accidental Death Insurance)
- 65th birthday (TPD Cover, Trauma Cover, Trauma Plus Cover, Income Protection Cover)
- your child’s 21st birthday (Children’s Cover).
How often should I review my life insurance?
It’s a good idea to review your life insurance regularly, especially if your financial circumstances change.
For example, if you take out a home loan or start a family, you may decide to increase your Life, TPD and or Trauma cover (up to the maximum benefit allowable ).
Conversely, if you’ve paid off your mortgage and your kids have left home, you may decide to reduce your cover.
And if you change jobs or get a promotion, you may wish to reassess your Income Protection Cover.
Can I change my insurance?
Yes. You can apply to increase or decrease your benefit amount (the sum you’re insured for) at any time, provided any increase is within the maximum limits.
You can also add optional cover (e.g. TPD and/or Trauma) to your Life Cover (depending on your entry age); or change your status from a smoker to a non-smoker (a minimum 12 months after quitting), which may reduce your premium.
To change your policy details, please call us on 1800 300 592.
How does the claims process work?
We understand that life insurance claims can be stressful, so we try to deal with each claim as quickly, efficiently and compassionately as we can. Find out how to make a claim on your life insurance policy.
How are claims paid?
On acceptance of your Life, TPD or Trauma cover claim, your benefit amount will be paid as a lump sum to you (or, if you die, your beneficiaries or legal representative).
If your beneficiary is a minor, the payment will be made to the minor’s legal guardian or trust.
If your beneficiary pre-deceases you, his or her share will be paid to your legal representative or another person we are legally allowed to pay.
Income Protection benefits will be paid monthly in arrears – in other words, you will receive your first benefit payment from 30 days after serving out your nominated waiting period. For example, if you selected a 30-day waiting period, you will receive your first payment from 60 days after lodging your claim.
If I have been diagnosed with a terminal illness and less than 12 months to live, can I apply for an advance payment of my death benefit?
Yes, the terminal illness must be certified by a Medical Practitioner approved by us and supported with the necessary test results to confirm the diagnosis.
Do you offer to pay funeral costs in advance?
Yes. While assessing a death claim, we may advance $10,000 of the Life Cover or Express Life Cover benefit amount to assist with funeral costs and other expenses.
Are life insurance premiums tax deductible?
In most cases income-protection premiums are tax-deductible, life insurance premiums are generally not, however for more information, visit the Australian Taxation Office website.
Are life insurance payouts free from tax?
It depends on who is listed as the beneficiary, and who actually receives the payout (‘benefit amount’) from the insurer.
Where the lump sum benefit goes to the insured or in the case of death their nominated beneficiaries, the payout is typically received tax free.
Income protection benefits would be taxed as income.
For more information, speak to an accountant or tax agent.
How are premiums paid?
You can pay your premiums by automatic direct debit from your bank account or credit card. You can change your payment method at any time – just give us a call.
The premiums are deducted fortnightly, monthly or annually from the ‘first premium date’ shown on your policy schedule.
You get one opportunity a year to change your payment frequency, on the anniversary of your policy.
Can I cancel my policy?
Yes. You can cancel you policy by writing to us and giving 30 days’ notice.
If you request the cancellation within 30 days of your cover starting – the cooling-off period – we’ll refund you any premiums you may have paid (assuming you have not made any claims).
To cancel your policy, please send a written cancellation request as well as your policy schedule to:
Budget Direct Life Insurance
PO Box 342
Toowong QLD 4066
(Your policy may be reinstated within 90 days of the date the policy was forfeited or cancelled, provided we agree and subject to terms and conditions.)
What’s the difference between trauma insurance and health insurance?
Trauma insurance provides you with a lump sum payment in the event of certain serious illnesses and injuries like cancer and stroke.
Depending on the type of health insurance it can cover the costs of some hospital expenses and medical treatment, but may not extend to additional expenses you may incur as a result of trauma.
These additional expenses can include rehabilitation equipment, ongoing nursing care, home/vehicle modifications and living costs.
In short, health insurance alone may not be enough to protect you in the event of serious illness and injury.
When it comes to Income Protection Cover, what’s considered to be a ‘serious illness or injury’?
One that results in you being unable to work and earn an income from your usual occupation; and requires ongoing medical treatment. The illness or injury must be certified by your medical practitioner and confirmed by one or more medical specialists nominated by us.
How much Income Protection Cover do I need?
It’s up to you. Your decision on what monthly benefit amount to choose (up to 75% of your pre-tax income, up to a maximum of $10,000 per month) will generally boil down to how much money you think you’ll need each month to cover your ongoing living expenses.
Who underwrites Budget Direct life insurance?
Budget Direct life insurance is underwritten by Hannover Life Re of Australasia, a wholly owned subsidiary of Hannover Re Group, one of the largest reinsurers in the world.
As the underwriter, Hannover accepts liability and guarantees payment for Budget Direct life insurance claims that are accepted.
Hannover has been underwriting life insurance in Australia since 1958 and has a financial-strength rating of AA- “Very Strong” (Standard & Poor’s).
It means our customers can rest easy, knowing their life insurance is in safe hands.