Whether you’re looking into life insurance for the first time, or if you’ve had cover before – there's lot of info about how life insurance works out there.
The trouble is that myths can stop you looking into cover that could help your family if something unexpected happens. Below, we unpack common myths and explain what's really going on.
Life insurance through super is enough
Many Australians have some death cover through their super fund, but it's usually a basic amount that might not match what your family needs.
Default super cover isn't tailored to your mortgage, debts or children's ages. The amount can be lower than what you'd arrange yourself. Cover can end if accounts become inactive or are closed. It's worth checking how much you have and if it suits your own situation.
With Direct Cover, you can get up to $1.5 million life insurance benefit paid to your loved ones, depending on your age when you apply.1
Life insurance is too expensive
This is often false. The cost varies depending on your age, whether you smoke, your health, what you do for work and how much you want to insure.
Premiums are generally lower when you're younger and in good health. Some policies offer stepped premiums that start lower and rise over time which may be easier to afford given your income is likely to increase over time too. Cheaper policies may have more exclusions, so it's worth comparing what you're actually getting.
Direct Cover Life Insurance asks health and lifestyle questions so your premium reflects your situation. Australian residents aged 18-70 can apply with no medical exams, blood tests or complicated forms, simply answer some health and lifestyle questions, and you're all set. The lump sum benefit can help with mortgage repayments, rent, debts, bills, school costs or funeral expenses. Not only that, but if you’re a non-smoker, you’ll enjoy lower premiums.2
Only breadwinners need life insurance
If a partner who earns less or doesn't earn an income passes away, the surviving partner may need to pay for childcare, cleaning, transport and other support. Unpaid care work contributes significantly to Australia's economy and isn't free to replace. Thinking only of cover as salary replacement understates the real financial impact.
I'm too young
What really matters is whether anyone would be financially affected if you died.
If you're younger with no debts and no one relies on your income, you might not prioritise cover. Once you have a partner, kids or shared loans, the picture changes. Premiums also tend to be lower when you apply at a younger age and while you're in good health.
I can't get it as a smoker
Smokers can usually apply for cover, but they'll pay higher premiums than non-smokers of the same age and gender for the same benefit amount. That’s why, with Direct Cover Life Insurance, you’ll enjoy lower premiums if you’re a non-smoker.2
Insurers treat smoking as a risk factor because it's linked with higher rates of serious illness and earlier death. Being honest at application time matters. Giving inaccurate information about smoking can affect whether a future claim is paid.
It's only for people who want to leave an inheritance
Leaving a lump sum as an inheritance is one possible use, but it's far from the only one.
Many families use a payout to help with mortgage repayments, rent, personal loans or credit cards. It can also cover everyday living costs, school fees or childcare, or simply giving loved ones breathing space to adjust. Some policies may also pay an amount early if the insured person is diagnosed with a terminal illness.
Direct Cover Life Insurance provides a lump sum benefit your family can use however they need it most, with immediate cover from day one for death and terminal illness,1 so you can get on and enjoy life.
I don't have any dependants, so I don't need it
If nobody relies on your income and you have no shared debts, cover might not feel like a priority.
However, some people without children still have financial commitments that could affect others. Examples include joint mortgages, personal guarantees for a family member's loan, business partners who'd need to buy out your share, or parents who'd struggle to cover your final expenses.
I can't get it as I have a health condition
Some serious or complex health conditions can make it seem like you can’t get cover but the truth is having a medical history doesn't automatically mean you'll be declined.
Insurers usually ask detailed health and lifestyle questions. Depending on your answers, they may offer cover on standard terms, add a loading to your premium, apply exclusions for certain conditions, or in some cases decline the application. Non-disclosure of past illness or treatment can lead to reduced benefits or declined claims.
Claims are not paid
This myth often comes from high profile dispute stories that don't show the full picture.
Regulators publish data showing most death claims in Australia are accepted and finalised, often within a few months. When claims aren't paid, common reasons include the event not meeting the policy definition, exclusions that apply, the policy having lapsed, or important information not being disclosed at application time.
ASIC's claims comparison tool lets you see what proportion of claims different insurers have paid and how long they typically take to decide.
You need to take a medical to get it
Often false, especially for direct policies sold over the phone. Many Australians can apply by answering health and lifestyle questions, without needing to book an appointment or have blood tests.
Insurers may sometimes ask for medical reports or tests if you want a very high level of cover or if your health history is complex. Direct Cover's application is simple. If you’re an Australian resident aged 18-70, you can apply with no medical exams, blood tests or complicated forms, simply answer some health and lifestyle questions, and you're all set.
Stay-at-home parents don't need it
This myth treats income as the only thing that matters and overlooks the cost of replacing all the unpaid work a stay-at-home parent does.
If a full-time carer passes away, the surviving partner may suddenly face childcare fees, after school care, and help around the home. A lump sum could help pay for support during what's already a stressful time.
I already get it through my superannuation
Many super funds include default death cover and sometimes total and permanent disability or income protection.
However, that default cover usually isn't tailored to your family’s needs. The benefit amount may be lower than what you'd choose yourself, and it may reduce as you get older. Cover can stop if your account becomes inactive, your balance drops below a threshold, you change funds or you're under 25 and haven't opted in.
It's worth checking how much you have, how long it would last, and whether it lines up with your priorities before relying on it as your only protection.
Help protect what matters most
We’re dedicated to helping you protect the life you’ve built. With our simple application process and a friendly team of professionals ready to answer any questions you might have, you could get some peace of mind with Direct Cover today. Just give us a call on 1800 576 978, Monday to Friday from 8am to 7pm (AEST/AEDT), excluding NSW public holidays.