The duration for which an insurance policy remains in force, typically running for one year in Australia before requiring renewal. For life insurance, policies are usually annually renewable to age 65, 70, or 99, while some policies offer fixed terms like 10 or 20 years.
The policy term is the period over which your insurance cover is guaranteed to remain active, subject to premium payments and policy conditions. Most Australian life, TPD, trauma, and income protection policies use a 12-month rolling term with annual renewal.
The contract is technically renewed each year, but cover continues seamlessly as long as premiums are paid. The annual structure lets insurers:
| Product type | Typical end age | |---|---| | Life cover | Age 99 to 100 | | TPD | Age 65 to 70 | | Trauma | Age 70 | | Income protection | Age 65 to 70 |
Income protection ends when income-earning capacity does. Life cover can extend almost lifetime. Some insurers also offer term life with fixed periods (10, 15, or 20 years) at level premiums, after which the policy expires unless converted or renewed.
APRA regulations require insurers to disclose policy term details, renewal procedures, and any circumstances where renewal might be declined in the PDS and policy documents.
A 30-year-old purchases life insurance with a policy term structure that renews annually to age 99, ensuring coverage throughout their entire life as long as premiums are paid
A parent buys 20-year term life insurance with level premiums to cover the period until their children become financially independent, after which the policy expires and they reassess their insurance needs
An income protection policy with annual renewal terms continues from age 35 to 65, with premiums and coverage reviewed each year, until the final policy term when the insured reaches retirement age and coverage ends
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