Life insurance is a form of financial protection that looks after your loved ones when you die or can't work anymore. With the right policy, life insurance can provide your family with enough money to pay off your debts and allow them to continue to enjoy their current standard of living.
How does life insurance work?
Life insurance helps your family cope financially after you die. It can pay off any loans and debts you have, such as a mortgage or car loan, as well as provide your family with enough money to pay for everyday living expenses. In exchange for this financial security, you pay a monthly payment (a premium) to the life insurance provider. Your premiums are calculated based on your chances of dying, so factors such as your age, health, occupation and sex are taken into account.
How do I get life insurance?
You can buy a policy online or through a broker. Check out the comparison table below to get started.
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Finder survey: How many Australians think life insurance is worth it?
Response
Buying a home
17.3%
Source: Finder survey by Pure Profile of 1110 Australians, December 2023
Why compare life insurance with Finder?
You pay the same price as buying directly from the life insurer.
We're not owned by an insurer (unlike other comparison sites).
We've done 100+ hours of policy research to help you understand what you're comparing.
Top picks for life insurance in Australia
Top pick: Winner
NobleOak Life Insurance
Finder AwardBonus
$25 million sum insured
1st place in Finder Awards: 8.45 final score
Fully underwritten policy
Cheapest average policy price
Top pick: Finalist
TAL Accelerated Protection Life Insurance
Finder AwardBonus
Pays up to $5 million in TPD
2nd place in Finder Awards
Interim accident cover
$25,000 funeral advancement
Top pick: Finalist
RACWA Life Insurance
Bonus
Pays up to $25 million
3rd place in Finder Awards
TPD and trauma options
$15,000 funeral advancement
We picked these policies after analysing the results from Finder's life insurance awards for 2023.
NobleOak Life Insurance: NobleOak's maximum payout for death or terminal illness is $25 million. Most providers offer cover limits of between $1 and 2.5 million. With NobleOak, you can add as much as $5 million in TPD cover – the most out of all 10 providers we analysed for the 2023 Finder Awards.
TAL Accelerated Protection: TAL's life insurance scored highly on price in the most recent Finder Awards. It was the second cheapest provider across 4 age groups – it also offers a comparatively strong policy. It pays $25,000 in funeral expenses and you have the option to add children's cover. It also offers flexibility by not setting a maximum benefit limit.
RAC Life Insurance: RAC life insurance is underwritten by NobleOak. This means it offers similar cover levels, high benefit limits (RAC goes up to $25 million) and quality add-ons. Our research team found NobleOak was more competitive than RAC on cost – by $75 per month on average (factoring in smokers and non-smokers).
When should I get life insurance?
If you want it to be as affordable as possible, the best time to get life insurance is when you're fit, young and healthy. This is because you're more likely to get cover without exclusions and it'll be cheaper. Consider getting life insurance at the following important life stages:
Taking out a mortgage
Getting a new job
Getting married
Having children
If you wait until you're older, and perhaps have developed some health issues, your life insurance premiums are likely to be more expensive. There is also a chance that your medical condition will be excluded from cover. Many insurers exclude pre-existing conditions when you buy a policy, which means they won't pay out if you die because of that illness.
How much life insurance do I need?
How much life insurance you need depends on how much you earn and how many repayments and expenses you have. To give you an idea of how life insurance works and how much you may need, check out our free life insurance calculator.
Answer a few questions about your assets, debts and cover to get an estimate on how much life insurance you might need
Things you should know
This quiz is designed to help you decide what type of life insurance you may need, and how much cover you may wish to apply for. Please note that:
This quiz provides general advice and information. It is neither an endorsement of nor recommendation for, life insurance. Calculations are based on the assumption that all assets besides your house will be sold. We hope that it can help you make an informed decision, but it isn't a substitute for professional advice. If you're unsure about anything, seek professional advice before you apply for any product or commit to any plan.
Limitations
This life insurance calculator assumes you will sell your house and assets in the event of death, disability or critical illness.
Calculations are based on limited information provided by your responses. It doesn't take into account special circumstances. For example, you might plan to have your family sell your house if you die but there's a good chance you'll want to hang on to it in the event of disability.
Life insurance calculators can't take these factors into account the same way an adviser can. An adviser can give you a better understanding of how your needs can be very different depending on your circumstances. While life insurance calculators are great for building up an idea of what you need, it's a good idea to seek professional advice for something as important as life insurance.
How do life insurance claims work?
Unlike most insurance claims, a life insurance claim isn't made by you, the policyholder. When you take out a policy, you'll nominate a beneficiary – usually a loved one. They are the one(s) who will have to file the claim. To make a claim, they will need to do the following:
Get a copy of the death certificate
Let the insurer know by providing your policy information, date and cause of death
At this stage, your insurer will usually send your beneficiaries a claims form to complete and return. They will most likely need to provide a copy of the death certificate and any other documents that the insurer has requested. They will also be asked to provide the bank account they would like the payout to be deposited into.
How do life insurance payouts work?
With a standalone life insurance policy, the beneficiaries you nominate will receive the payout in one large lump sum after you die, deposited in the bank account(s) of their choice. If you outlive your beneficiaries and don't update your policy (you can simply do this by calling your insurer), your funds will be distributed to your estate.
Things can be a little different if you have a life insurance policy inside super. In these circumstances, you need to make sure that you make a binding nomination, which is a written notice given to the trustee of your super fund. Otherwise, your super fund decides who the lump-sum payment goes to.
How do the different types of life insurance work?
There are four different types of life insurance. Here's how they work:
Maximum cover. This is the most they will pay out, so if you need more than say, $1 million, don't go with a provider that caps it at this amount.
Maximum entry age. Some insurers stop providing cover once you reach a certain age. This usually gets difficult around the age of 65.
Funeral cover. Look for a life insurance policy that provides a funeral benefit. This often pays out quicker than the entire lump sum and ensures your loved ones don't need to worry about paying for the funeral.
TPD cover. If you have a high-risk job, it's definitely worth buying a life insurance policy that also covers total and permanent disability. It will pay out if you need to permanently stop work due to injury or illness.
How does cancelling a life insurance policy work?
You are allowed to cancel your life insurance policy at any time. Many insurers also have a cooling-off period, meaning you can cancel within a set period without financial loss. However, it's important to know that your insurer doesn't need to refund any of the premiums you've already paid if it is outside of that period.
Also keep in mind that if you cancel and sign back up at a later date, you will probably be hit with higher premiums and possibly some exclusions. This is because you will be older than when you signed up to your initial policy and may have had health issues in that time.
However, if you've already done a bit of shopping around and found that you could be paying less for the same amount of cover, then switching might be a good idea. You can typically cancel your policy by getting in touch with your insurance provider by phone or email.
Why you can trust Finder's life insurance experts
We're free
You pay the same as buying directly from the life insurer. Better still, we regularly run exclusive deals that you won't find on any other site – plus, our tables make it easy to compare policies.
We're experts
Our team of life insurance experts have researched and rated dozens of policies as part of our Finder Awards and published 250+ guides to make it easier for you to compare.
We're independent
Unlike other comparison sites, we're not owned by an insurer. That means our opinions are our own and we work with lots of life insurance brands, making it easier for you to find a good deal.
We're here to help
Since 2016, we've helped 270,000+ people find life insurance by explaining your cover options, simply and clearly. We'll never ask for your number or email. We're here to help you make a decision.
FAQs
Life insurance can pay any outstanding debts you have, including mortgage repayments and car loans. It can also pay for everyday living expenses.
Life insurance policies do not cover deaths involving suicide if it occurs within a specific time period of the applicant taking out a policy. In general, most life insurance policies will not cover any injuries, illnesses or disabilities that are self-inflicted.
Gary Ross Hunter is an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146).
Life insurance can be bought directly from an insurer. Learn about the benefits and a few watch outs you should be aware of.
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