Average Cost of Life Insurance

What is the average cost of a life insurance policy in Australia?

Because of the personal nature of life insurance, there is no average policy. However it's possible to get a general idea of how much life insurance costs on average. Let's look at the average cost for two common ages when cover is made: 35 and 45.

Amount of CoverGenderAverage monthly premium
$200000 of cover Male$18.78
$500000 of cover Male$30.27

Amount of CoverGenderAverage monthly premium
$200000 of coverMale$28.92
$500000 of coverMale$51.55

The average cost of life insurance are calculated from quotes from finder.com.au's life insurance engine and are based on an office worker from NSW. The cost was last checked as accurate on June 2017 and is subject to change at anytime.

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How much life insurance do you need?

Working out exactly how much life insurance you need is not an easy task. In order to determine your cover needs, you’ll need to take a number of factors into account:

  • Your income. If you're unable to work due to illness, injury or death how would your family cope with out your income? Make sure you life insurance policy is enough to replace your income for the foreseeable future.
  • Your dependents. If you have people that are financially dependent upon you, you need to take into account their ongoing expenses and think about how they'd be affected by the loss of your income.
  • Your expenses. Do you have a mortgage, car loan, credit card or other debts? Calculate the ongoing expenses your family will need to be able to pay in order to maintain their lifestyle?
  • Your assets. Consider any assets you may have accumulated, for example shares, savings or investment properties. Do you want your family to live off these or would it be more prudent to provide them with enough cover so that they could keep these investments?

What affects the cost of your life insurance?

As mentioned, a wide range of factors can influence how much you’ll have to pay for your life insurance premiums. These include:

  • The type of cover you apply for. Life insurance can be used to refer to a range of products including term life insurance, trauma insurance, TPD insurance and income protection cover. Different policies will obviously attract different costs.
  • How much cover you apply for. The higher the level of cover, the more expensive the policy.
  • How old you are. It’s a sad fact of life that we’re more prone to health problems as we age, and it can take older people longer to recover from injuries and illnesses than their younger counterparts. With this in mind, your age can have a significant effect on your premiums.
  • Your occupation. Some jobs expose you to minimal risks, such as working in front of a computer in an office. Other occupations, for example underground mining, expose you to dangerous situations. This means you are more likely to suffer an injury, which will then increase the cost of your life insurance premiums.
  • Your gender. Women typically live longer than men and pay less for life insurance.
  • Your lifestyle. How many alcoholic drinks do you consume a week? Are you a smoker? Do you like to participate in high-risk sports and adventure activities? All of these factors can contribute to a significant rise in premiums.
  • Your health history. Pre-existing medical conditions can prompt an insurer to charge you more for cover. Such conditions include high blood pressure, diabetes or a family history of heart disease.

How can you cut down your life insurance costs?

  • Quit smoking. At the top of the list of possible lifestyle changes is quitting smoking. The myriad diseases and associated health problems linked to smoking are well known. If you’re a smoker, you can expect to pay close to double the premiums than that of a nonsmoker.
  • Cut down on drinking. Reducing the amount you drink, like quitting smoking, may allow you to find cheaper life insurance.
  • Lose some weight. Your BMI is an important factor to your life insurer and the lower your BMI the lower the risk you pose to an insurer.
  • Get a lower level of over. If your circumstances have changed since you first took out cover, you may want to consider reassessing your cover amount. If your financial obligations have lessened, for example your children have become independent, then you may wish consider lowering your benefit amount.
  • Review your options. Looking around for a new provider and a new policy is another option. Make sure to find a trusted and reputable insurance company, as well as a policy that can be tailored to suit your needs.
  • Look for discounts. One final trick to keep more money in your wallet is to look for discounts. You may be able to take advantage of cheaper premiums by taking out a family or joint policy instead of single cover.

Cost of living in Sydney vs the cost of life insurance

Myths about life insurance

Myth 1

  • Life insurance is too expensive. This is simply not true. This article contains plenty of tips on how to keep your premium costs to a minimum, and when you consider the importance of the financial protection that life insurance provides, it quickly becomes obvious that it is a very worthwhile investment.

Myth 2

  • It’s a waste of money. Life insurance is designed to protect those you love in times of need. How would your family cope if you were injured and unable to work? How would they keep up with mortgage repayments, credit card debts and other ongoing expenses? Life insurance is like a financial safety net for your loved ones, ensuring that they will be able to cope with whatever life throws at them.

Myth 3

  • Applying for cover is a long and hard process. With the rise of direct life insurance, applying for cover is easier than ever before. Direct life insurance policies are designed to be simple and straightforward, allowing you to apply for cover and receive approval in a very short period of time. You’ll just have to answer a few questions about your health, while many companies will provide cover without even requiring you to undergo any medical tests.

Compare Life insurance quotes from these direct brands

Name Product Maximum cover Maximum Entry Age Minimum Sum Insured Guaranteed Future Insurability Expiry Age Short Description
Get a quote for up to $15 million in life insurance cover. Cover can be tailored to meet your personal needs.
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™ .
Receive a 10% discount on the second person when two applications are submitted at the same time, and both policies are issued.
Flexible cover options to suit your budget. New eligible customers can receive 25,000 Velocity Points. Ends 31 Aug 2018. Min monthly premium and T&Cs apply.
Get flexible life insurance up to the sum of $2,000,000.
A simple life insurance product that can offer up to $1,500,000 in a lump sum payment on death or diagnosis of terminal illness.

Compare up to 4 providers

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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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Maurice Thach

An insurance researcher and writer for finder.com.au who loves finding an answer to the question "Am I covered for ________?" Maurice has also completed a Tier 1 Life Insurance and a Tier 2 General Insurance Certification under ASIC's Regulatory Guide 146. This means he can confidently provide general advice for life insurance and non-life insurance products.

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