There are several classes of life insurance policies in Australia and before you decide to pass your settlement in for a lump sum payment you may find the following information essential to know.
Terminology in insurance is essential for clarity and if you are uncertain of the terminology used it could cost you many hundred’s of dollars. If you don’t clearly understand the wording either go back to the insurance company and ask them for clarification in writing or get professional legal advice.
The classes of insurance in Australia are whole of life, an endowment policy, a term policy an annuity policy or an Industrial policy. There are possibly less common ones available but these are the more usual insurance structures.
An Industrial policy is one where a small sum of money is paid regularly into a policy to insure either themselves or their infant children’s lives. This type of policy matures after a predetermined fixed period or upon the death of the person insured should the death occur first.
These classes of insurance are the most common ones world wide and any differences that may come about are probably from your country’s legislation governing the insurance industry or from your State legislation. Also some insurance companies have different terms and conditions from state to state even when you are in the same country.
Insurance policies are contracts and as such need thorough legal understanding as to what you can and can’t do with your insurance policy. Not all insurance policies are allowed to be settled prior to their maturity date so before you spend the money be very sure that the settlement you are counting on receiving can be achieved. The best place to get this information is to go back to your insurance company that you are holding the policy with and get their guidelines and advice in writing.