Woolworths Announces Flexible Life Insurance Plans - Lifebroker

Australians aged 18 to 65 will be able to apply for Woolworths Life Insurance, which has a fairly flexible premium payment plan. Underwritten by Swiss Re and distributed by the Hollard Group, those who choose to join the new plan may pay their premiums either fortnightly, monthly, or annually.

The plan will have a coverage policy of between $100,000 to $1.5 million depending on the level of income and age of the insured. Woolworths has undertaken the venture partially because it wants to help ordinary Australians enter the insurance market in a way that is non-threatening and easy to understand. Research indicates that many Australians find the concept of life insurance confusing, confirming Lifebroker's findings in the Life Insurance Research Report conducted in 2010 highlighting Australia's underinsurance problem.

Indeed, life insurance is rarely designed to be straightforward. In its most basic form, life insurance provides a financial relief for family members of the deceased. It can be an excellent way to set up university funds for children or grandchildren, or simply stash some "rainy-day" money for an unexpected event. However, many providers try to maximise their profits by designing confusing term limits and withdrawal policies. Some life insurance policies can act as a kind of bank account for policyholders while they are alive. Some policies are designed to expire within a certain time period; 5 year term life insurance, for example, is only valid for that particular span. Should the insurer outlive the policy and fail to update it, the premiums will not be returned, and the remaining family will receive no financial benefit.

Woolworths has entered the market with the intention of becoming a long term insurance provider. The sheer numbers of uninsured Australians have convinced the company that this is an enormous opportunity for them. Woolworths has built its reputation as a company that provides for a variety of the financial needs of its customers, including credit cards and mobile phone plans. While Woolworth's has always placed an emphasis on making the shopping experience as easy and intuitive as possible, how this will translate to insurance policies remains to be seen. One thing is for certain: with the incredible flexibility that these plans provide, each Australian should at least be able to find a plan that meets their immediate needs.