Life insurance (death cover) provides a payment on a person’s death*. When the insured person dies, a lump sum is paid to the owner of the policy (or beneficiary). If the person who is the life insured is the policy owner, the money will be paid to either a nominated beneficiary or to their estate if no beneficiary is nominated.

The owner of the policy could be yourself, your spouse, a business partner or a super fund or other entity.

Who is the most appropriate owner depends on your reason for taking out the insurance and your family circumstances. Speak with your professional adviser for guidance.

The amount of life insurance you apply for can cover:

• money to repay outstanding debts, such as a mortgage, or share of a business you may be an owner in
• a lump sum to generate income needed for the dependant family for a period of time
• any additional amount you wish to have paid out as part of an estate plan for your beneficiaries, and
• funeral costs.

*Some life insurance policies may provide a payment upon your death or diagnosis of a terminal illness that is likely to lead to your death within a specified period (eg 12 or 24 months).