Death Insurance

Death insurance can support your family if you die or become terminally ill.

Updated Dec 23, 2020

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Death insurance cover (also called life insurance) pays out a sum of money, for example $500,000 so that your loved ones can take care of ongoing expenses - like a mortgage for instance. You may want to consider death cover if:

You're starting a family
You own a home and mortgage
You don't want your family to take on your debts when you die

We've compared death cover options from Finder partners below.

Compare death insurance and get a personalised quote

Death cover is not just limited to life insurance payouts. Most life insurers will offer benefits related to death cover like an advance funeral benefit. This will help with any immediate costs that a funeral requires. Take a look at the funeral benefit limits on the policies below and see how much will be able to put towards funeral planning.

Name	Minimum Cover	Maximum Cover	Maximum Entry Age	Terminal Illness Benefit	Funeral Benefit
NobleOak Life Insurance Finder Award	$10,000	$15,000,000	69	$3,000,000	$15,000	First month free for NobleOak Life Insurance. T&Cs apply.	Get Quote View details	Compare	loading Fetching your data...
AAMI Life Insurance	$100,000	$1,500,000	65	$1,500,000	$10,000	Get 5% off for existing customers.	Get Quote View details	Compare	loading Fetching your data...
ahm Life Insurance	$100,000	$1,500,000	65	$1,500,000	$15,000	ahm Health members can save 10% off premiums.	Get Quote View details	Compare	loading Fetching your data...
Zurich Ezicover Life Insurance	$50,000	$1,500,000	69	$1,500,000	$15,000	Get the first month free and a 10% discount if you take out a second life insurance policy (discount applies to second policy). T&C’s apply.	Get Quote View details	Compare	loading Fetching your data...
Real Family Life Cover	$100,000	$1,000,000	64	$1,000,000	$10,000	Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™ .	Get Quote View details	Compare	loading Fetching your data...
Guardian Life Insurance	$100,000	$1,500,000	64	$1,500,000	$15,000	Get Quote View details	Compare	loading Fetching your data...
Medibank Life Insurance	$100,000	$2,500,000	70	$2,500,000	$15,000	You could win a $1000 EFTPOS gift card when you get a Life Insurance quote by 2 Feb 2021. There’s a winner each week. Plus, Medibank health members save 10% every year. T&Cs apply.	Get Quote View details	Compare	loading Fetching your data...

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What is death insurance cover?

Death cover can deliver peace of mind for you and your family. If something happens, this type of insurance can help secure your family's future, and ensure that they don't need to face the burden of financial uncertainty while simultaneously coping with grief.

Lump sum payments in the event of death or terminal illness
Advance payments to help cover the immediate costs
Financial planning and counselling benefits for your family
Benefit payments available in the event of serious injury or illness

No one knows what will happen in the future, and it can be hard to tell what the immediate and ongoing effects of loss might have on your family. The range of benefits available with death cover policies can let you minimise the impact as far as possible, and take proactive steps to care for your children and partner.

Whether you want to ensure that your family can maintain their quality of life, not have to struggle with debts and mounting bills in your absence or simply want to minimise the financial burdens of loss, you can choose cover to suit.

What type of expenses am I covered for?

Some of the expenses that death cover can provide relief for, include:

Rent or mortgage repayments
Children’s education expenses
Daily living expenses and needs, such as food and clothing
Costs to hire housekeeper or nanny

Home maintenance costs
Funeral expenses
Legal expenses
Estate settlement costs

How do I determine my life insurance needs?

It is difficult to set a standard insurance policy that would apply to all policy holders. There is not just one death cover that can be considered to be ideal to all, which is why it is important to assess and compare different policies to determine which plan would be most suitable to you and your family's needs. Deciding on the death cover amount to insure may not be such as a simple task, but the best way to calculate the right amount to match your needs, consider:

You current annual income. Replacing your lost income for the years required
Short-term and long-term debts. This often includes mortgage, credit card debts, personal loan, and car loan
Your immediate expenses. This includes food, clothing and shelter (rent payments, if you don't own your home)
Your children's education expenses. Consider the number of children you have and their respective ages to determine the total amount of expenses
Emergency funds. Work out how much of your expenses such as a funeral arrangement, medical treatments, legal fees and estate settlement costs can be covered by your savings.

You can use a life cover calculator to give you an indication on how much you may need for a death cover. If you require further assistance, an experienced death cover agent can help you in determining an ideal amount that will match your needs situation, as well as providing tailored advice on life policies that suit what you require.

What forms of death cover are available?

The two main types of life insurance are term life insurance and funeral cover, both of which can pay out the full sum insured on death. If you are not eligible to obtain term life insurance (such as due to medical conditions or age), a funeral plan may be a good option.

Term life insurance
Funeral plans

Term life insurance is generally a more flexible and detailed type of cover than funeral insurance. It lets you choose from a wider range of benefits and payout conditions that suit your needs, and will often have significantly higher maximum benefits than funeral insurance. Generally a term life insurance policy is designed to help provide for one's partner or family in years to come, and can be adjusted over the years as you enter different life stages, and your financial needs and obligations change.

A funeral plan lets you take out a specific amount of cover, such as $20,000, which is paid to your beneficiary when you die and can be spent at their discretion. It can be an important form of cover to help with the administrative costs and mortuary fees, as well as the funeral itself. For example, your beneficiary might use it to help the rest of your family travel to the funeral when it might otherwise be cost-prohibitive, make sure their own affairs are in order or anything else. You can generally have two people on the same funeral plan, and should either one pass away, the other can receive the benefits. This can make it a useful and relatively affordable way of planning ahead.

Death cover for different life stages

You're relatively young and healthy and your premiums are reasonably low. You might be single, or you might have a family and dependents, and can find a level of cover to suit. As your responsibilities grow you will typically be adjusting your policy and increasing your level of cover later on. Here, additional disability cover with term life insurance can deliver an important extra layer of protection for you in the event of life-changing accident or illness.
You may be more likely to be married with children, your partner might not also be working like when you were younger, and you might be bearing more financial obligations. Investments and debt can also make up a significant portion of your finances which should be considered when comparing life insurance policies or adjusting cover. You might have children, or be planning for kids in the future, and their age will determine how far ahead you need to plan for their education expenses. Disability can be just as significant a concern as death, and could derail your plans equally, putting you and your family in a difficult position. With more assets, more costs and more dependents, as well as your retirement to think about, a comprehensive and versatile life policy can be important in this life stage.
At this point your children have likely moved out and you're looking towards retirement. It's time to start thinking seriously about health issues as they're becoming much more likely with advancing years. Protecting your investments and assets through life insurance may be an important part of retirement planning, and paying off the mortgage and other debt before retirement is also a concern. Don't underestimate the level of cover you might need in order to provide for a long retirement spanning several decades. Consider your children's circumstances when looking at policies, as well as the likelihood of your partner being able to return to the workforce if something happens.
After retirement, your financial obligations will generally have decreased, but naturally so has your income. You can get cover to help you keep up with your plans, such as travelling, in line with your financial capacity. The assets you've spend a lifetime building may need to be protected, as might other continuing financial obligations towards your partner or other dependents. Estate planning and aged care costs can be worth considering, as are growing medical expenses or costs relating to other health needs. Financial planning might also be important to consider, specifically in the form of estate tax mitigation and budgeting for an extensive retirement with many years ahead. The policy to match that budget and help you maintain your lifestyle, while protecting important obligations, can depend largely on your circumstances, such as your age of retirement and current income from assets.

Can death cover pay for accidents and injuries?

In the event of a fatal accident or injury, death cover of both types, funeral plans and term life insurance, can pay out, while some benefits may also be available for survivable accidents or injuries, although these are generally only available with term life insurance policies.

The accidental death benefit available with term life insurance policies can pay out an additional amount should your death be the result of an accident, in order to help compensate for the suddenness of the event and additional costs that may be associated. This may only be available with term life insurance policies.
For severe but survivable accidents you may also be able to link additional forms of cover to your policy including:
- Trauma, serious injury or serious illness cover: In the event of specified health events you can get paid lump sum benefits. The specific events covered will vary between policies, but can include cardiac arrest, cancer, loss of limbs, blindness, heart surgery and many others.
- Total and permanent disablement or income protection insurance: Should you suffer an accident, injury or illness that leaves you permanently disabled, this type of policy can pay benefits. Depending on the type of cover, disabled might be defined by an inability to work, an inability to perform specific tasks or a percentage measurement of disability based on your physical injuries and loss of function.

What is funeral cover?

Funeral cover is a simple insurance product that can provide many benefits and you have the flexibility to choose the amount you want to insure yourself for. If you are in the older age group and have little debt all, you may want to consider a funeral plan that will take care of your funeral costs, which can be quite considerable in this day and age. Funeral costs are the type of expenses that you wouldn't want to burden your loved ones with and with a funeral plan in place, your family can be rest-assured that they can afford the arrangement that you would've wanted.

Compare death cover policies

Thank you for your feedback!

Richard Laycock

Richard Laycock is Finder’s insights editor after spending the last five years writing and editing articles about insurance. His musings can be found across the web including on MoneyMag, Yahoo Finance and Travel Weekly. When he’s not doing deep dives on data, he is testing the quality of cocktails in his newfound home of New York. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance.

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Death Insurance

Death insurance can support your family if you die or become terminally ill.

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