Life insurance in the Australian market

The growth of life insurance in Australia.

Life insurance in Australia is officially more than 180 years old. The first policy was sold by Asteron, then known as Alliance Assurance, and countless others have followed since. Today there are more than 20 active providers in Australia’s life insurance marketplace, edging each other out with competitive pricing, discounts and additional benefits.

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How big is Australia’s life insurance marketplace?

It has its ups and downs, but here's a snapshot of Australia's growing life insurance market.

Source: Strategic Insight 2018

What life insurance brands are available in Australia?

When assessing a brand, consider:

  • The scope of the brand. Some insurers are big brands with thousands or even millions of customers around the world, while others are smaller, more specialised and only exist in Australia.
  • The types of products offered. Some providers only offer certain types of insurance while others are general insurance companies with many products. Others still are banks, investment companies and even diversified grocery stores.
BrandType of brandKey featuresApply
AAMIGeneral insurance companyEasy to adjust later on, strong customer service recordMore info
AIAInternational health insurance specialistSuperannuation options, many available policiesMore info
AMPFinancial services provider and insurerStrong investment focus, highly tailored plansMore info
Asteron LifeFinancial planning services and life insuranceExpert advice, policies to fit long-term financial plansMore info
Aussie InsuranceAustralian lender and insurerCompetitive prices and widely varied productsMore info
BTWestpac-owned financial services providerEasily upgradeable policies, integrated financial planningMore info
Bank of QueenslandHolistic financial services company, Australia-wideCompetitive prices and accessible policiesMore info
Bendigo BankHolistic financial services company, Australia-wideClearly tiered policies, affordable cover for childrenMore info
BupaInternational healthcare providerWide variety of plans and optionsMore info
CGUFinancial products and services providerCompetitive prices through tailored policiesMore info
CitibankLarge worldwide financial services providerMany options, including quick policies that require no medical testsMore info
CommInsureCommonwealth Bank insurance divisionExtra benefits for financial planning, varied policiesMore info
GIOSuncorp-owned general insurance providerTailored policies, no medical tests, expanded cover optionsMore info
GuardianDedicated life insurance providerUp to $1.5 million sum insured, no medical or blood testsMore info
HSBCGlobal financial services companyPolicy flexibility, many options availableMore info
InsuranceLineIncome, life and funeral insurance specialistsLow entry requirements with basic policies, periodic discountsMore info
MacquarieHolistic financial services providerPolicies that pay benefits based on the impact of an injury or illness rather than its categorisationMore info
MedibankHealthcare and health insurance providerVaried options, including policies that require no medical or blood testsMore info
MLCInvestment and financial services providerPolicies include superannuation rollover options, flexible premium optionsMore info
NABBanking and financial services providerAccess to a very wide network of doctors and hospitalsMore info
nibHealthcare and insurance providerExtra benefits for nib membersMore info
NobleOak Life InsuranceLife insurance specialistFully underwritten coverMore info
OnePathInsurance provider with a focus on life coverExtra cover while travelling, guaranteed renewabilityMore info
Real InsuranceGeneral insurance providerSeparate family cover, flexible premium options, competitive pricesMore info
Virgin MoneyFinancial services providerFlexibly tailored policies, options for with or without medical testsMore info
WoolworthsSupermarket, financial services and moreMaximum sum insured increases with age, no medical tests requiredMore info
ZurichFinancial services with a focus on investment and insuranceDeath benefits can be increased annually without reassessment, up to $1.5 million sum insuredMore info

Note: While we make every effort to keep this list of Australian life insurance brands updated, it may not always show every brand in the market as new brands are created, others merge and so on.


Who holds the largest share in the Australian life insurance market?

The top 5 performing insurers in the Australian life insurance market according to the Australian Prudential Regulation Authority (APRA) December 2018 report are:

RankInsurerTotal assets ($billion)Market share
1AMP Life Limited9843.6%
2OnePath Life Limited4218.7%
3Challenger Life Company Limited198.5%
4The Colonial Mutual Life Assurance Society Limited135.5%
5Westpac Life Insurance Services Limited104.2%

Life Insurance Options for Australians

Term life insurance

Term life insurance is sometimes called death only cover because it pays your loved ones a lump sum payment when you die. The money can then be used to pay for any final expenses your family might have upon your death, such as funeral and medical expenses, mortgages, and death. It will help them with the emotional transition without worrying too much about the finances. Aside from this, other popular insurance products available to Australians are income protection, trauma insurance, and TPD insurance.

Income protection

If you’re temporarily unable to work on account of injury or illness, income protection insurance pays 75% of your monthly gross income until you can return to work or the policy expires.

TPD insurance

Total and permanent disability insurance, or TPD, pays a lump-sum benefit if you become totally and permanently disabled from injury or illness.

Trauma insurance

Trauma insurance pays out upon diagnosis of a critical illness, if you suffer a critical injury or undergo certain medical procedures. This option does not pay for fatal conditions – only core life insurance does. A waiting period of two weeks usually applies to ensure that you survive the event.

Important facts about Australian superannuation and life insurance

Superannuation is compulsory for all employees working in Australia. It often comes bundled with life insurance, so this should be taken into consideration when looking at policies.

If you haven’t already, you should check whether your superannuation fund already includes life insurance. You might already have a life insurance policy you didn’t know about, or you might discover a great option to consider alongside other policies.

If you’re thinking of getting life insurance through superannuation, watch out for both the benefits and the downsides.

Pros

  • Often more cost-effective than getting an equivalent policy elsewhere.
  • You are often able to select a minimal level of cover for essential protection, even if money is tight.
  • Premiums are automatically deducted and can be paid for with super contributions, making the policy easy to manage and maintain.

Cons

  • Certain policies may not be as good as what you can get elsewhere, and you might not have all the options you want.
  • Getting life insurance through superannuation is only possible if you’re a member of that super fund. Switching super funds carries its own costs and might not always be worth it, even for a better life insurance policy.
  • If you move to a different super fund, your circumstances change or the super contributions stop then your cover may end without notice.
  • There are different tax implications with superannuation life insurance. You may need to consult an adviser for more information on how these affect you personally.
  • Benefits are often slower to be paid. The insurer pays benefits to the superannuation fund, who then in turn pays out to your beneficiaries. This extra step slows things down.
  • Coverage period typically ends sooner. Life insurance cover through superannuation typically ends around age 60–70. Finding standalone policies outside of super funds lets you find options that last longer.
  • It will reduce your super balance. If getting a life insurance policy through superannuation, your premiums will be paid by the balance of your super fund. In other words, you’re paying for insurance with your retirement funds instead of money out of pocket.

Even if you decide not to get a life insurance policy through superannuation, it’s important to at least check your fund to see what kind of insurance is available, if any, and to confirm whether or not you’re already paying for life insurance without knowing it.

Advisers or direct life insurance: which is right for you?

You can find and compare policies either by looking at direct brands, which are insurers that advertise and sell directly to policyholders, or by going through an insurance broker or adviser. Depending on your situation, you may find one more preferable than the other.

Consider going direct if:

  • You know what you want in a policy. Life, trauma, TPD and income protection cover are all very different.
  • You have the time and motivation to compare as many policies as possible.
  • You know about all your existing insurance, including workers compensation and any policies held through superannuation funds. An ideal life insurance policy will fill in the gaps as required without overlap. For example, the right option for you might be to cancel a superannuation insurance policy and replace it with a complete new policy, while someone else is better off buying cover for TPD and trauma only while keeping income protection and life cover through superannuation.

Consider an advised policy if:

  • You are considering a life insurance policy that’s geared towards investment or specifically want something to be bundled with superannuation. Depending on your circumstances, beneficiaries and what kind of insurance policy it is, there may be different tax implications.
  • You want additional protection for your partner or children. Many policies will cover them as well, but this may not always be the ideal way to protect them.
  • You are having difficulties understanding or comparing different policies. Life insurance is an important purchase but only brings real protection and peace of mind if you know it’s done right. An insurance broker can walk you through policies, answer all your questions, explain anything you’re unsure of and make sure you know exactly what you’re buying.
  • You have pre-existing medical conditions or a particularly dangerous job. Insurers will often consider these on a case by case basis, and may charge more or completely exclude benefits payable for these. Getting adequate protection for pre-existing conditions or hazardous pastimes, without breaking the bank, might require the help of an expert.
  • You are self-employed, or a part-time or casual employee. This has particularly big implications for income protection and TPD policies, will make you ineligible for certain policies and can result in higher prices elsewhere.
  • You want claims help. If you’re seriously ill or injured then the last thing you want to do is put together a claims form and all the documentation. Similarly, a grieving family usually isn’t in the best position to negotiate with an insurance company. Insurance brokers can also liaise with insurers, lodge claims for you and follow up on them on your behalf.

The benefits of having life insurance

Life insurance is something you hope you’ll never use, designed specifically to protect against the unexpected. Naturally this makes it difficult to plan for a “return on investment”. Every year, however, tens of thousands of Australians claim billions of dollars on life, trauma, TPD and income protection insurance policies, despite hoping they’d never have to. When considering the benefits of having a policy, think in real terms of what it actually means for you and your family rather than only as numbers on paper.

  • Get the power of choice. Having financial back-up in the event of an emergency means you can look at more treatment options and different specialists. Reducing the urgency and financial stress of these situations lets you spend more time on treatment and better plan for recovery without breaking the bank.
  • Adjust to new circumstances. Adjustments can be expensive, particularly if they involve something like fitting a wheelchair ramp to your front porch or hiring someone to provide around-the-clock care. In the event of injury or illness you might find yourself deciding between doing what’s best for you and doing what’s affordable for your family. A good life insurance policy can help you do both.
  • Plan for the future. The cost of accidents, illnesses and injuries is unpredictable and mostly comes down to sheer luck. Being in a car crash might only make you a bit late for work, or it might simultaneously kill you, disable your partner, wipe out your savings, burden your children with debt and incur decades of crippling medical expenses. It’s obviously not possible to plan for this, let alone budget for it, except with life insurance. A life insurance policy lets you replace completely unpredictable potential costs with consistent, predictable and affordable actual ones.

Compare Australian Life Insurance Quotes

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Coverage is the amount of money that you will be paid in the event of a claim. An insurance consultant can help you determine an appropriate amount. Calculator
Provides a lump sum payment if you become totally and permanently disabled and are unable to return to work.
Provides a lump sum payment if you suffer a serious medical condition. Cover can be taken out for 40-60 medical conditions depending on the policy you choose.
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Compare life insurance quotes from these direct brands

Name Product Maximum cover Maximum Entry Age Minimum Sum Insured Cooling-off
(days)
Expiry Age Short Description
$1,000,000
60
$100,000
30
99
Get life cover up to $1 million.
$15,000,000
69
$50,000
30
99
Get two months free when you combine life insurance with another type of cover. T&C’s apply. Ends 20 December 2019.
$1,000,000
64
$100,000
30
No expiry age as long as premiums are paid
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™.
$1,500,000
65
$3,000
30
80
Choice of cover options and flexible premiums to suit your budget. No lock-in contracts and fast application.
$1,500,000
65
$100,000
30
No expiry age as long as premiums are paid
Get life cover up to $1.5 million. Plus, ahm health members can save 10% off premiums.
$1,500,000
65
$100,000
30
No expiry age as long as premiums are paid
Get a quote & you could win a $1,000 eftops Gift Card. Offer ends 19 January 2020. T&C's apply.
$1,000,000
65
$100,000
30
80
Receive one month's premiums off every year if you pay annually upfront. T&C’s apply.
$1,500,000
69
$50,000
30
99
Receive a 10% discount on the second person when two applications are submitted at the same time, and both policies are issued.
$2,000,000
74
$100,000
30
100
Get life cover up to $2 million.
$1,500,000
65
$100,000
30
99
Take out a policy and get a $100 bonus gift after holding cover for 2 months. T&C's apply. Ends 31 March 2020.
$1,500,000
64
$100,000
30
No expiry age as long as premiums are paid
Cover up to $1.5 million with Guardian Life Insurance.

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