Life insurance pays a lump sum if you die (and usually if you're diagnosed with a terminal illness), which your family can use to clear debts or invest for an ongoing income. If the cover is held in your super, the payment goes through your super fund as a death benefit. If it's held in your own name, it's paid to your nominated beneficiaries.

In this video, McKern financial adviser Kristian Tangan explains how long a claim typically takes to pay (often one to two months), what the policy contract spells out, and common exclusions, such as deliberately entering a war zone, or suicide within the first 13 months of a new policy.

In this video

0:06 What is life insurance?

0:37 How long does it take to be paid out?

1:11 What terms and conditions are in the contract?

1:26 What doesn't a policy usually cover?

General information only, not personal advice.