Learn the types of cover available and what's right for you
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.
It has its ups and downs, but here's a snapshot of Australia's growing life insurance market.
Source: Strategic Insight 2018
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.
|Brand||Type of brand||Key features||Apply|
|AAMI||General insurance company||Easy to adjust later on, strong customer service record||More info|
|AIA||International health insurance specialist||Superannuation options, many available policies||More info|
|AMP||Financial services provider and insurer||Strong investment focus, highly tailored plans||More info|
|Asteron Life||Financial planning services and life insurance||Expert advice, policies to fit long-term financial plans||More info|
|Aussie Insurance||Australian lender and insurer||Competitive prices and widely varied products||More info|
|BT||Westpac-owned financial services provider||Easily upgradeable policies, integrated financial planning||More info|
|Bank of Queensland||Holistic financial services company, Australia-wide||Competitive prices and accessible policies||More info|
|Bendigo Bank||Holistic financial services company, Australia-wide||Clearly tiered policies, affordable cover for children||More info|
|Bupa||International healthcare provider||Wide variety of plans and options||More info|
|CGU||Financial products and services provider||Competitive prices through tailored policies||More info|
|Citibank||Large worldwide financial services provider||Many options, including quick policies that require no medical tests||More info|
|CommInsure||Commonwealth Bank insurance division||Extra benefits for financial planning, varied policies||More info|
|GIO||Suncorp-owned general insurance provider||Tailored policies, no medical tests, expanded cover options||More info|
|Guardian||Dedicated life insurance provider||Up to $1.5 million sum insured, no medical or blood tests||More info|
|HSBC||Global financial services company||Policy flexibility, many options available||More info|
|InsuranceLine||Income, life and funeral insurance specialists||Low entry requirements with basic policies, periodic discounts||More info|
|Macquarie||Holistic financial services provider||Policies that pay benefits based on the impact of an injury or illness rather than its categorisation||More info|
|Medibank||Healthcare and health insurance provider||Varied options, including policies that require no medical or blood tests||More info|
|MLC||Investment and financial services provider||Policies include superannuation rollover options, flexible premium options||More info|
|NAB||Banking and financial services provider||Access to a very wide network of doctors and hospitals||More info|
|nib||Healthcare and insurance provider||Extra benefits for nib members||More info|
|NobleOak Life Insurance||Life insurance specialist||Fully underwritten cover||More info|
|OnePath||Insurance provider with a focus on life cover||Extra cover while travelling, guaranteed renewability||More info|
|Real Insurance||General insurance provider||Separate family cover, flexible premium options, competitive prices||More info|
|Virgin Money||Financial services provider||Flexibly tailored policies, options for with or without medical tests||More info|
|Woolworths||Supermarket, financial services and more||Maximum sum insured increases with age, no medical tests required||More info|
|Zurich||Financial services with a focus on investment and insurance||Death benefits can be increased annually without reassessment, up to $1.5 million sum insured||More info|
Note: While we make every effort to keep this list of Australian life insurance brands updated, it may not always show every brand in the market as new brands are created, others merge and so on.
Who holds the largest share in the Australian life insurance market?
The top 5 performing insurers in the Australian life insurance market according to the Australian Prudential Regulation Authority (APRA) December 2018 report are:
|Rank||Insurer||Total assets ($billion)||Market share|
|1||AMP Life Limited||98||43.6%|
|2||OnePath Life Limited||42||18.7%|
|3||Challenger Life Company Limited||19||8.5%|
|4||The Colonial Mutual Life Assurance Society Limited||13||5.5%|
|5||Westpac Life Insurance Services Limited||10||4.2%|
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.
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.
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 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.
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.
- 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.
- 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.
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.
- 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.
- 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.
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.
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