Do I need life insurance?

Quiz: Do I need life insurance?

When to think about taking out life insurance

People think about life insurance around these life stage changes:

New job

Married

Had a baby

Bought a house

Made a large investment

Come into a large amount of money

The most common are:

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Based on where I'm at in life, what type of cover do I need?

Everybody is different and cover requirements will change based on the events you encounter at different life stages. But still, it's worth a look at a more detailed overview of key times many decide to take out cover based on their life stage.

Different types of life insurance

Here are the main types of life and income protection cover you can get:

• Life cover. Term life insurance provides a lump sum benefit to your beneficiaries in the event of death or after the diagnosis of a terminal illness. You can get this insurance as a standalone policy, or bundled with more cover options.
• TPD insurance. Total permanent disability (TPD) insurance provides a lump sum benefit if the policyholder suffers a disability as defined in their policy.
• Trauma insurance. Provides a lump sum benefit if the insured suffers a medical trauma that is specified in their policy. Most policies will cover up to 50 different conditions including strokes, cancer and heart attacks.
• Funeral insurance. Funeral insurance provides a lump sum benefit to cover funeral costs and other outstanding expenses. The maximum amount of cover that can be taken out is usually about $15,000.
• Income protection insurance. Income protection offers an ongoing benefit of up to 70% of the policyholder's regular income if they are forced to take time off work due to illness or injury. This benefit is usually paid monthly.

How much life insurance might I need?

The amount of life insurance you need depends on your personal circumstances, such as your age, and the type of cover you want. Start by coming up with an annual sum you'd need to cover your financial commitments. Some experts say the amount of cover you'd want is at least 10 times your annual salary. But it's really up to you to decide how much your family would be comfortable with based on your situation.

You could also check to see if you already hold some life cover, such as via employment benefits. See how much that would pay out to your dependents and then calculate how much extra they might need.

Did you know?

Some 9 million Aussies hold Total Permanent Disability (TPD) cover, a type of life insurance, in their super accounts. This counts for 86% of all TDP covering the country. It's worth checking to see what insurance (if any) you have through your super fund. Read more on how Life insurance through super works.

Top picks for life insurance in Australia

Top Pick for

Highest maximum cover

NobleOak Life Insurance

Finder Award

Top Pick for

Member perks

Medibank Life Insurance

Top Pick for

Strong reputation

Zurich Ezicover Life Insurance

Compare life insurance quotes from more direct brands

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Name	Product	Maximum Cover	Maximum Entry Age	Terminal Illness Benefit	Average Claims Acceptance Rate	Average Claim Time	Sum Insured
NobleOak Life Insurance Finder Award		$15,000,000	69	$15,000,000	98.1%	1.1 months	$20,230 million	Get 2 months free when you apply for one or more life insurance types with NobleOak's Premium Life Direct policy before 30 June 2022. T&Cs apply.	Get Quote View details	Compare	loading Fetching your data...
TAL Life Insurance		$2,000,000	74	$2,000,000	87.10%	2.9 months	$36,630 million	Finder verifies that TAL has more Australian lives insured than any other provider - for 3 years in a row. Plus, get up to 15% off with TAL’s Health Sense program.	Get Quote View details	Compare	loading Fetching your data...
Real Family Life Cover		$1,000,000	64	$1,000,000	90.20%	1.8 months	$53,462 million	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...
Medibank Life Insurance		$2,500,000	70	$2,500,000	87.30%	3.8 months	$31,745 million	With Medibank Life Insurance, you’ll also get access to the 24/7 Medibank Nurse phone service. Medibank health members will save 10% on premiums every year. T&Cs apply.	Get Quote View details	Compare	loading Fetching your data...
Zurich Ezicover Life Insurance		$1,500,000	69	$1,500,000	Data not available	Data not available	$12,444 million	Get your first month free and a 10% discount by taking out a second life insurance policy (discount applies to the second policy). T&C’s apply.	Get Quote View details	Compare	loading Fetching your data...
ahm Life Insurance		$1,500,000	65	$1,500,000	87.20%	3.8 months	$31,745 million	Get ahm life insurance by 30 June and keep your cover for 6 months to receive $100 cashback. T&Cs apply^.	Get Quote View details	Compare	loading Fetching your data...
RAC Life Insurance (Only available in Western Australia)		$25,000,000	69	$25,000,000	98.10%	1.1 months	$20,230 million	When you purchase RAC Life Insurance, WA residents receive complimentary RAC membership which includes access to discounts on fuel, savings on shopping, entertainment and more. T&Cs at rac.com.au.	Get Quote View details	Compare	loading Fetching your data...
RACQ Life Insurance		$1,000,000	65	$1,000,000	97%	Data not available	Data not available	View details	Compare	loading Fetching your data...

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Frequently asked questions

• Do I still need life insurance if I'm retired?

  The need for life insurance often reduces once people enter their retirement years and their financial obligations change. You may wish to decrease the amount of cover you have in future years, but still have some in place to:

  • Provide a legacy to your surviving children in the event of your death
  • Cover your funeral expenses
  • Tie up any final expenses such as legal fees or taxes

• What factors will affect the cost of my life insurance?

  Your age, gender and lifestyle (for example, whether or not you smoke) are some of the key factors an insurer takes into account when setting your insurance premium.

  The cost of your policy isn't everything when you're comparing life insurance though. You may choose to add more features to your cover and pay a bit more for your premium.

  It's important to find a policy that'll meet your specific needs and circumstances. If you prefer, speak to an insurance specialist to help you find personalised cover.

  Enter your details and one of our partner brokers will call you. They will discuss your quote, options and available products.

  First Name

  Last Name

  Phone

  Email

  State ACTNSWNTQLDSATASVICWA

  Age

  Sex

  Male

  Female

  Do you smoke?

  Yes

  No

  Level of Protection UnsureNone$100,000$200,000$300,000$400,000$500,000$600,000$700,000$800,000$900,000$1,000,000$1,250,000$1,500,000$1,750,000$2,000,000

  An adviser can help you find cover from trusted life insurance brands.

  • Get competitive quotes from multiple brands
  • Lower rate of declined claims (according to ASIC)
  • Save time and effort

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• Do I still need life insurance if I'm retired?

  It is natural for the need for life insurance to reduce once people enter their retirement years and their financial obligations change. You may wish to decrease the amount of cover you have in future years but still have some in place to:

  • Provide a legacy to your surviving children in the event of your death
  • Cover funeral expenses
  • Tie up any final expenses such as legal fees or taxes

  It is worth taking into consideration existing assets that may be used in the event of your death such as:

  • Superannuation
  • Savings
  • Property
  • Other assets such as car, contents

• What type of cover should I get if I'm still young?

  For young people, there's typically less of a need to get life insurance as there are fewer ongoing financial obligations compared to those who are older or with families of their own.

  However, funeral insurance is an option to consider. Then there's TPD, Trauma or Income Protection, all of which can offer support if you suffer a serious injury or illness.

• Where might I already hold other types of insurance?

  Most Australians have some sort of cover in their super fund and/or through workers' compensation insurance, but make sure you check as this won't be the case for everyone.

  Good to know: These default cover types usually have more restrictive benefits and less generous terms in comparison to standard life insurance policies.