How to get life insurance on a shoestring budget

Life insurance doesn't have to break the bank. Find affordable cover by following these tips.

The misconception that life insurance is too expensive often deters Australians from getting decent cover. But you can get an affordable life insurance policy without sacrificing cover quality or breaking your budget.

How do I obtain life insurance that I can afford?

  • What insurance suits your needs. Where you are at in your life and your personal circumstances has an impact on how much cover you will need.
  • Understanding the different features of a policy. Features such as premium type can affect how much you pay.
  • Compare your options. Reviewing policies online and with a consultant can help you find an affordable policy that still covers you adequately.

The safety and wellbeing of your loved ones is important to you, so it is crucial to ensure that there is a form of protection in place should you no longer be around to care for them. This article will explore different types of life insurance plans to consider and tips on how to find suitable cover for you that is still within your budget.

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Compare Life insurance quotes from these direct brands

Rates last updated November 18th, 2017
Name Product Maximum cover Maximum Entry Age Minimum Sum Insured Guaranteed Future Insurability Expiry Age Short Description
$15,000,000
69
$0
Yes
99
Get a quote for up to $15 million in life insurance cover. Cover can be tailored to meet your personal needs.
$1,500,000
65
$3,000
No
80
Flexible cover options to suit your budget. New eligible customers can receive 25,000 Velocity Points. Ends 31 Nov. Min monthly premium and T&Cs apply.
$1,500,000
65
$100,000
Yes
99
Receive a discount of 10% on life insurance as a Woolworths Rewards Member. T's and C's apply.
$2,000,000
59
$50,000
Yes
99
Get flexible life insurance up to the sum of $2,000,000.
$1,000,000
64
$100,000
No
99
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™ .
$1,500,000
69
$0
Yes
99
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

Want to compare budget deals directly from an insurer?

Get up to 25% off Virgin Life Insurance

Receive a 25% discount off your premium when you purchase cover over $500,000 in cover.

Get 10% off Real Life Insurance with Real Reward

After 12 months, receive back 10% of the premiums you've paid with the Real Reward™.

Get 10% off Woolworths Life Insurance

Get up to $1.5 million in life cover and save 10% off your Woolworths Life Insurance premium if you're a Woolworths Rewards member.

Life insurance discounts for certain policies

You may be eligible for discounts on your life insurance policy if you have multiple policies, joint policies, or policies where the cover amount exceeds a certain level. These discounts can be significant. It's always a good idea to ask what discounts are available when shopping for insurance.

A multi-policy discount usually applies when you combine more than one type of cover (e.g. Income protection with life insurance) with the same provider.

ProviderMulti-policyConditionsApply
AIAUp to 12.5% discount
  • Annual premiums for each must at least by $700
  • You must hold an income protection policy and a lump sum policy
Speak to an adviser
AMP ElevateUp to 5% discount
  • You must hold an income protection policy with a lump sum policy
  • Minimum benefit amounts apply
Speak to an adviser
AsteronUp to 5% discount
  • You must hold an income protection policy and/or lump sum policy and/or a business expenses policy
Speak to an adviser
BTUp to 5% discount
  • Eligible policies include Term Life, Term Life as Superannuation, Standalone Living Insurance, Standalone TPD, Business Overheads, Key Person Income and income protection.
Speak to an adviser
MLCUp to 30% discount
  • Discounts depend on the level of cover and the types of policies you combine
Speak to an adviser
OnePathUp to 5% discount
  • You must combined Income Protection with another policy
Speak to an adviser

A joint policy discount usually applies when you apply for cover cover either with a spouse or another family member.

ProviderJoint policy discount/Family discountConditionsApply
ANZYou may receive a discountSpeak to ANZ directly to find out if you're eligibleGet a quote
Zurich Ezicover
  • $3.50 off per month for joint life insurance
  • 5% discount for joint income protection
  • Two applications must be received at the same time
  • Discount applies to the second policy
Get a quote
InsuranceLine
  • 5%
The younger adult receives a discount when you apply on the same policyGet a quote
Virgin
  • $3.50 off per month for joint life insurance
  • 5% discount for joint income protection
No conditions stated in PDSGet a quote
AIA
  • 5% discount if 2 people are insured
  • 10% discount if 3+ people are insured
Annual premiums for each must at least by $500Speak to an adviser
AMP Elevate
  • 5% discount for business relationships
  • Two or more clients submit new business to AMP
  • Available on life, TPD and trauma plans / options
Speak to an adviser
Asteron
  • 10% discount if 8 or more people insured
  • 7.5% discount if 5 to 7 people insured
  • 5% discount if 2 to 4 people insured
You might be eligible for discounts if you apply at the same time with immediate family members or business partners in the same entitySpeak to an adviser
ClearView
  • 2.5% discount if 2 people are insured
  • 3% discount if 3+ people are insured
Discount available at the time of application where there is a family group relationship or businessrelationship between the persons insured.Speak to an adviser
OnePath
  • 5% discount if 2 people are insured
  • 6% discount if 3 people are insured
  • 7% discount if 4 people are insured
  • 8% discount if 5-6 people are insured
  • 9% discount if 7-9 people are insured
  • 10% discount if 10 or more people are insured
Available if you link your policy with an eligible family member, business partner or combination of family members and business partnersSpeak to an adviser

A larger sum discount applies when you purchase cover for a sum over a set amount defined by the insurer.

ProviderHigher cover discountConditionsApply
Virgin25% discount available for any cover above $500,000Premiums must be paid within 30 days of the due dateGet a quote
InsuranceLineUp to 15% discountSize of discount depends on the amount of cover insured and the type of cover that's insuredGet a quote
AIAUp to 30% discountSize of discount depends on the amount of cover insured and the type of cover that's insured.Speak to adviser
AMP ElevateUp to 36% discountSize of discount depends on the amount of cover insured and the type of cover that's insuredSpeak to adviser
AsteronDiscount available (Check with an adviser)Size of discount depends on the amount of cover insured and the type of cover that's insuredSpeak to adviser
BTUp to 30% discountSize of discount depends on the amount of cover insured and the type of cover that's insuredSpeak to adviser
ClearViewUp to 24% discountSize of discount depends on the amount of cover insured and the type of cover that's insuredSpeak to adviser
OnePathUp to 32% discountSize of discount depends on the amount of cover insured and the type of cover that's insured.Speak to adviser
TALUp to 34% discountSize of discount depends on the amount of cover insured and the type of cover that's insuredSpeak to adviser
Zurich Future WiseUp to 24% discountSize of discount depends on the amount of cover insured and the type of cover that's insured.Speak to adviser

How do I get life insurance quotes to suit my budget?

If you are on a tight budget, it doesn’t mean that you can’t obtain quality life insurance cover with affordable premiums. There are a number of ways to find a policy that suits your needs, while keeping the cost of cover down.
Some of the ways in which you can reduce the cost of your life insurance cover include:

  • Shop around: It is important to remember that the cost of life insurance cover can vary from one plan and provider to another, so it can really help to shop around. You will be surprised to see how much you can save when you browse and compare life insurance plans. There are a number of different factors that can affect the cost of your cover, such as your general health, your occupation, the level of coverage you are looking for, etc.
  • Speak to an insurance adviser: With so many different policies and insurers on the Australian market, finding the right cover to suit your needs on your own can be overwhelming. Therefore, consider speaking to an insurance consultant who can help you in finding the right policies for you and securing competitive prices for your cover. This can help you to save money on the cost of your life insurance as well as to save yourself time when it comes to finding suitable cover.
  • Make some lifestyle changes: While you will be able to benefit from lower premiums due to your younger age, you could find yourself being penalised for certain lifestyle choices that could be seen as increasing the risk of ill health and death. This could include smoking, excessive drinking and poor diet/ lack of exercise contributing to unhealthy weight. Making changes to these areas, such as quitting smoking, improving your diet and losing weight, and cutting back on your drinking could help to decrease the cost of cover as well as ensuring you lead a healthier life.

What types of life insurance are available?

There are a number of different types of life insurance plans available in Australia, with each designed to provide financial assistance in the event of an illness, injury or death. These include:

  • Life Cover. Is also known as term life insurance and it provides a lump sum payment to your nominated beneficiaries if you were to pass away or have been diagnosed as terminally ill with no more than 12 months to live.
  • Total and permanent disability insurance. This is a type of living insurance that provides a lump sum benefit in the event that you have been permanently disabled and you are unlikely to work ever again.
  • Trauma insurance. This is another type of living insurance, which provides a lump sum payment upon a diagnosis of a life-threatening medical event, such as cancer, heart attack, major organ transplant, open heart surgery and multiple sclerosis.
  • Income protection. Is designed to provide a replacement income in the event of a serious illness or injury and you are unable to work temporarily. It provides an monthly benefit generally of up to 75% of your average income.
  • Funeral insurance. Provides a lump sum benefit to your beneficiaries to fund your funeral arrangements and any related expenses.

What type of life insurance suits my current life stage?

Life Insurance States Graph

Your needs will change over time as you go through different stages of life, so will your insurance needs. Life insurance is important to have, even if you have a limited budget. There are number of different ways that you can organise your life insurance policies to suit your personal circumstances, and not sacrifice too much of your day to day budget.

Why is Life Insurance Essential for Singles?

Life stageLife insurance plans to considerCommon expenses to cover
1. Young and single
  • TPD
  • Ongoing cost of active lifestyle
2. Young working adults or couples
  • TPD
  • Life insurance
  • Trauma cover
  • Ongoing costs of living
  • Living expenses of dependents
  • Short term debts
3. Young families
  • TPD
  • Life insurance
  • Trauma cover
  • Income protection
  • Ongoing costs of living
  • Living expenses of dependents
  • Short term debts
  • Mortgage
  • Raising children
4. Maturing families
  • TPD
  • Life insurance
  • Trauma cover
  • Income protection
  • Ongoing costs of living
  • Living expenses of dependents
  • Short term debts
  • Decreased mortgage
5. Retirees
  • TPD
  • Life insurance
  • Trauma cover
  • Protecting accumulated wealth
  • Life style changes
  • Beneficiaries

Finding the Right Life Insurance for Over 50s

Can I get cheaper cover with a direct life insurance policy?

Direct life insurance means skipping advisers and retailers and buying direct from an insurer. Direct life insurance is fast and convenient to purchase, since you can be it quickly online.

Is direct life insurance cheaper?

Many insurers offer discounts for buying direct, but this doesn't always guarantee you'll get the cheapest deal. Direct life insurance policies usually have less options and aren't always tailored to your specific cover needs. You might end up paying more for features you don't need, or saving money only to find that your policy doesn't cover you when you need it most.

As always, know your cover needs, shop around and read the fine print.

Direct life insurance offers

PolicyFeatures
Virgin Life InsuranceChoice of cover options and adjustable premiums to suit your budget. Fast application without a lock-in contract.
American Express Term Life InsurancePay nothing in premiums for the first month. Discount up to 10% available when multiple policies are purchased.
NobleOak Term Life InsuranceSave 25% on NobleOak life insurance with no premium payments in the first month.
ANZ Life InsuranceFast cover application and flexible payment options.
Zurich Ezicover Life InsuranceGet up to 10% discount when multiple policies are purchased.

Find more direct life insurance offers

How do premiums work when it comes to life insurance?

Understanding the different types of premiums can help you save money in the long term or short term depending on your personal preference.

  • Stepped. Premiums that start off low but rise as you get older.
  • Levelled. Premiums that stay the same for the life of your policy. These premiums generally start off higher than stepped premiums but end up costing less in the long run.
  • Hybrid. This is a combination of stepped and levelled premiums. It generally starts off as a stepped premium and then converts to a levelled premium later on.

What should I look for when buying policies?

There are a number of policy features that you should look out for when comparing different life insurance plans and to ensure affordable premiums that are within your budget.

  • Joint life insurance policies: When applying for a life insurance policy, consider coverage for your partner/spouse as well. Most insurance providers will offer a discount on your monthly premiums for a joint policy.
  • Child cover: Some insurers may offer free or discounted children’s cover when you take out life insurance.
  • Payment options: You have the flexibility to choose your premium payment frequency, either on a fortnightly, monthly, quarterly or yearly basis. You will be eligible to a discount when you opt for an annual payment.
  • Superannuation rollover: Holding life insurance through your superannuation is affordable, however, the features on offer are often quite limited. If you are looking for more comprehensive cover and still retain your premium payments through super, consider rolling over your complying super fund to a superannuation account organised under an insurance company.

Receive a preliminary term life insurance quote from Australian providers

William Eve

Will is a personal finance writer for finder.com.au specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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