Top 5 Mistakes Australians Make When Buying Life Insurance
Buying life insurance is one of the most important steps you can take to protect your loved ones — but it’s also easy to get wrong.
At Covered Life, we speak to thousands of Australians every year, and many share the same frustrations: confusing terms, unnecessary extras, or cover that doesn’t match their life stage.
To help you make more confident choices, here are the five most common mistakes people make when buying life insurance — and how to avoid them.
1. Relying Only on Superannuation Life Insurance
Many Australians assume the life insurance included in their super fund is enough — but it often isn’t.
Super-based cover usually offers lower payout amounts and limited flexibility. For example, it might not include TPD or trauma cover, and may not adjust as your life changes.
While super insurance is a great foundation, it’s worth reviewing it regularly and considering retail life insurance to top up your protection.
2. Choosing the Cheapest Policy
It’s tempting to pick the lowest premium, but cheaper isn’t always better.
Some low-cost policies come with restrictive conditions or exclusions that make claiming harder. Others reduce benefits over time.
Instead of focusing only on price, look for value — that means strong claim definitions, reputable insurers, and flexible policy terms. A specialist broker like Covered Life can help you compare beyond just the cost.
3. Not Reviewing Cover as Life Changes
Life insurance isn’t “set and forget.”
As you move through life stages — buying a house, getting married, having children, or changing jobs — your insurance needs evolve.
A policy that fit your needs five years ago may no longer provide the right protection today.
Regularly reviewing your cover ensures you always have the right level of protection for your current situation.
4. Underestimating the Importance of Add-On Covers
Life insurance is only one part of the picture. TPD, Trauma, and Income Protection can all provide critical support if you’re injured, become ill, or can’t work.
Many people overlook these options because they’re unsure how they work, but in reality, they complement each other.
For example:
Trauma cover helps you recover from serious illness.
TPD helps if you can never work again.
Income protection keeps your household running during time off.
Together, they create comprehensive protection for every scenario — not just death or terminal illness.
5. Going It Alone
The insurance market can be complex. From definitions to exclusions, it’s easy to miss key details when applying directly to an insurer.
Working with an independent life insurance broker like Covered Life ensures you’re not navigating the fine print alone.
We compare leading Australian insurers, explain options in plain English, and help you avoid the traps hidden in generic online quotes.
Bonus Tip: Don’t Wait Too Long
The earlier you get life insurance, the more affordable it usually is. Premiums rise as you age, and pre-existing health conditions can make cover harder to obtain later in life.
Starting early locks in lower rates and greater peace of mind for years to come.
Why Covered Life?
At Covered Life, our mission is simple: to help Australians get the protection they need — without the headache.
We offer:
Access to top-rated insurers
Tailored, obligation-free advice
Support through setup, updates, and claims
Transparent, jargon-free service
Whether you’re reviewing your existing cover or buying life insurance for the first time, our specialists are here to help.
General advice disclaimer: The information in this article is general in nature and doesn’t take into account your personal financial situation, needs, or objectives. Always seek advice from a licensed professional before making decisions about your insurance cover.
