Insurance in Australia

lia has a sophisticated and well-developed insurance market, which can be divided into roughly three components: life insurance, general insurance and health insurance. These markets are fairly distinct, with most larger insurers focusing on only one type, although in recent times several of these companies have broadened their scope into more general financial services, and have faced competition from banks and subsidiaries of foreign financial conglomerates.

Life insurance
Life insurance products sold in Australia include term life insurance, disability income insurance. Australian insurers are unusual in providing a lump sum Total and Permanent Disability insurance. Life insurers also sell superannuation investment products.

[edit] Life insurers

Some of the life insurance companies which operate in Australia are:

• AIA Australia
• AMP Limited
• AXA
• Asteron Life (Suncorp)
• Allianz Australia
• MLC
• Macquarie Life
• miPlan
• OnePath (ANZ)
• Real Insurance
• TAL (previously Tower Australia)
• Zurich Australia

In addition, life insurance is also sold by friendly societies and credit unions.
General insurance
General insurance products sold in the Australian market can roughly be divided into two classes:

• Liability insurance such as Compulsory Third Party (CTP) motor insurance, worker's compensation, professional indemnity insurance and public liability insurance, business insurance;
• Property insurance such as Home and Contents insurance, travel insurance, and comprehensive motor vehicle insurance

Certain types of insurance, such as CTP and worker's compensation, are statutory (i.e. are required by law), and can differ considerably by state.

[edit] General insurers

The three large general insurer groups are:

• Insurance Australia Group (which includes NRMA, RACV, CGU, SGIO, Buzz)
• Suncorp (which includes AAMI, GIO, APIA, Just Car, Bingle)
• QBE Insurance

Other insurers are:

• Allianz Australia
• Hollard Insurance (which includes Real Insurance, Guardian Insurance, Aussie, Australian Seniors Insurance, RSPCA Pet Insurance, Choosi)
• Budget Direct (which includes Virgin Money)
• Australia Post ^[1]
• Wesfarmers (which includes Coles)
• Calliden Insurance
• Zurich Insurance
• Youi Insurance
• Progressive^[2]

Previous insurers include:

• Promina Group merged with Suncorp in 2007
• SGIO and SGIC purchased by IAG
• HIH Insurance collapsed in 2001

Health Insurance

The Australian Government provides a basic universal health insurance, Medicare. Private health insurance in Australia is limited to those services not covered by Medicare or to services provided in private hospitals.
The Australian Taxation system encourages middle to high income earners to take out Private Health Insurance. While most taxpayers pay a 1.5% Medicare Levy, an additional 1% Medicare Levy Surcharge is payable by those taxpayers who earn more than $76,000 and do not have Private Health Insurance.

What Types of Insurance cover?

Casualty

Main article: Casualty insurance

Casualty insurance insures against accidents, not necessarily tied to any specific property. It is a broad spectrum of insurance that a number of other types of insurance could be classified, such as auto, workers compensation, and some liability insurances.

• Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.
• Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions could result in a loss.

[edit]Life

Main article: Life insurance

Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. In most states, a person cannot purchase a policy on another person without their knowledge.

Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies, are regulated as insurance, and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities andpensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance.

Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities andendowment policies, are financial instruments to accumulate or liquidate wealth when it is needed.

In many countries, such as the US and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death.

In the US, the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles (e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation.

[edit]Burial insurance

Burial insurance is a very old type of life insurance which is paid out upon death to cover final expenses, such as the cost of a funeral. The Greeks and Romans introduced burial insurance circa 600 CE when they organized guilds called "benevolent societies" which cared for the surviving families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose, as did friendly societies during Victorian times.

CTP Insurance

Compulsory Third Party Insurance (commonly known as CTP Insurance) is a mandatory requirement and each individual car must be insured or the vehicle will not be considered legal. Therefore, a motorist cannot drive the vehicle until it is insured. A 'Green Slip,'^[2] another name by which CTP Insurance is commonly known due to the colour of the pages which the form is printed on, must be obtained through one of the five licenced insurers in New South Wales. Suncorp and Allianz both hold two licences to issue CTP Greenslips – Suncorp under the GIO and AAMI licences and Allianz under the Allianz and CIC/Allianz licences. The remaining three licences to issue CTP Greenslips are held by QBE, Zurich and IAL – NRMA. APIA now also supplies CTP but is only for over 50's who are no longer working full-time.

These state based third party insurance schemes usually cover only personal injury liability. Comprehensive vehicle insurance is sold separately to cover property damage and cover can be for events such as fire, theft, collision and other property damage.
CTP covers only personal injury liability
Third Party Insurance only covers damage that you are responsible for to someone else's property or vehicle .
Third Party Fire and Theft Insurance covers damage that you are responsible for to someone else's property or vehicle & It will cover your vehicle in the event of a fire or theft.
Comprehensive Insurance covers damage to your vehicle from an accident and any damage that you are responsible for to someone else's property or vehicle.

What is Car Insurance?

Vehicle insurance (also known as auto insurance, GAP insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise therefrom. The specific terms of vehicle insurance vary with legal regulations in each region. To a lesser degree vehicle insurance may additionally offer financial protection against theft of the vehicle and possibly damage to the vehicle, sustained from things other than traffic collisions.