If you've gotten married, bought your dream house or started a family, now's the time to protect them. Life insurance can give you peace of mind, knowing that they're cared for if you were to die or become terminally ill.
Compare Australian life insurance brands
This comparison was reviewed and published by Maurice Thach
Hi there! I'm the life insurance publisher for Finder. I've been writing about insurance for almost 4 years and I've completed the following qualifications under the Australian Securities and Investments Commission (ASIC) Regulatory Guide 146:
- Tier 1 Life Insurance Certification
- Tier 2 General Insurance Certification
You can be confident that I understand how life insurance works. If you need some help, check out the guide below:
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February 2019: A word on life insurance in Australia
Life insurance sold directly through an insurer was in the news last year for 'poorer claims outcomes'. These situations however, don't represent all life insurance policies and are avoidable in most circumstances. When you buy a policy here's what you should know:
- These policies are better designed for people without pre-existing medical conditions.
- 'Riskier' lifestyles e.g heavy drinkers, dangerous occupations are excluded.
2. Cost of premiums
- These are called stepped premiums.
- Review your cover regularly: As you get older and pay off your debts you might need less cover. You may be able to decrease your cover amount and keep your premium down.
- Consider 'level' premiums: Most policies will also give you the option to take out a premium that stays the same (but starts at a higher cost). These are known as level premiums. This could make sense if you are taking out cover from a younger age.
Note: Level premiums can still increase to keep up with inflation (which you can opt-out from). However, these are much less than increases from a stepped premium.
What does life insurance cover?
What expenses can life insurance take care of?
Handling every day living expenses
Paying off a mortgage or buying a house
Taking care of your debts
Video guide: Life insurance in 2 minutes
Note: If you want multiple situations covered make sure you let your insurer or an adviser know during the application process so you can get the right cover included.
How can you get life insurance in Australia?
First things first, it's important to understand the different ways that you can obtain life insurance in Australia.
- This is insurance without the middleman. It's usually sold to you online, via the TV, with your credit card account or with your personal loan.
- This type provides the largest and most comprehensive safety net. You need to receive financial advice from a financial adviser to obtain this type of policy.
What type do you need?
Consider your life stage and personal circumstances. You can use our graph below to get an idea of what types of cover makes sense for you.
Find the right coverage
Answer two quick questions to work out the type of cover you need.
Question 1 of 2
How much life insurance do you need?
|Type||How much you need|
|Life cover||Depending on your situation, enough to pay off or buy a family home and at least five years' worth of income for your spouse and family.|
|TPD cover||Depending on your age, enough to pay for a home, medical expenses and retirement.|
|Trauma cover||Enough for medical expenses ($100k is recommended for trauma cover) and a year's worth of gross income if you earn over $100k.|
|Income protection cover||75% of your gross income and super. It's best to choose a benefit period of up to at least age 65, to cover you up to retirement. And remember, the longer the waiting period, the lower the premium cost, but most should choose a 30-day waiting period to be safe. Only consider a 90-day waiting period if you have substantial emergency savings.|
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Simply compare the cost of a $500,000 policy vs the average costs of life that may need to be covered if you're not around.
|Average cost of a $500,000 life insurance policy||
$28.56 per month
|Average home loan size in Australia||
It's cheaper than a couple of movie tickets
The monthly premium for a $500,000 policy is around $28 for a 30 year old. Meanwhile, the cost of movie tickets for two people in Australia can cost around $39.
Pair of jeans e.g. Levis 501 or similar$112
|Expense||Average cost (Sydney)|
|Monthly life insurance premium ($500,000 of cover)||$28.56|
|Pair of movie tickets||$39|
|Internet 8 Mbps (1 month of connection)||$58|
|A summer dress in a High Street Store e.g. Uniqlo, Zara, H&M||$83|
|Pair of sport shoes e.g. Adidas, Nike, Puma, etc||$156|
|Pair of leather shoes (Mens)||$169|
|1 package of cigarettes e.g. Marlboro||$29|
Data sourced from Expatistan.com and compares the cost of living in Sydney. Date last updated August 2019
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How do you actually compare cover life insurance?
Research1 shows more people prefer to compare online than with an adviser, so you're not alone on this journey.
It's also pretty straightforward to compare online. Just follow this process:
1. Find out what cover you need
Consider type of cover you'll need and how much you'll need. List out the types with a rough figure of how much you'll need. For example:
Life cover: $1,000,000, TPD: $250,000, Income protection: $6,000 per month.
2. Compare prices and benefits
Use our quote engine to get an online comparison of:
Price, Features, Benefits, Age limits and more.
Or quickly compare cover without price.
About our comparison service
Finder is independently owned
Unlike some other comparison services, Life Insurance Finder™ is independently owned and operated. Our guides and articles are written in accordance with our strong editorial principles and guidelines. Any life insurers we partner with do not approve our content or editorial direction.
No phone calls unless you actually apply
You won't need to enter your contact details to compare the prices and features of different policies online.
The only call you'll get will be from an adviser once you've decided on the cover you want. Try it out.
More than just comparison
We believe in giving you informative guides so you aren't just blindly comparing on price.
Empower your life insurance choice with knowledge that will help you even after purchase.
We're constantly reviewing Australian brandsBack to top
Your premium is based on your age at the time of application and does not increase year-on-year. If you want to control your costs over time, level premiums are best. While they're usually more expensive than stepped premiums in the beginning, they're much cheaper than stepped premiums when you're older.
There are a few tricky life insurance terms worth knowing and expiry age is one of them. This is the term used when a policy has an age limit after which you can't make any more claims. This can range from ages 64 to 79 depending on the insurer.
It's worth knowing that the time of expiry is 12 months after the date listed, meaning you can still make a claim for any event up until that point. You can also still make a claim after this date if it's for something that happened before the expiry age.
A Guaranteed Insurability Feature is a good option to consider. This allows you to stay covered when your personal situation inevitably changes as you grow older, for example, when you get married or buy a house. Most policies allow you to increase or renew your level of cover once every 12 months without having to provide evidence of your health. It also keeps you safe if there are any changes to your health or financial situation.
How to keep the costs down when buying life cover
Here are some tips to get quality cover that won’t send you broke;
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Am I eligible for cover if...
Frequently asked questions
Whether you need it
Receiving a life insurance quote
Applying for cover
Making a claim
Disclaimer: Please read our Terms and Conditions to understand the services we provide and how we will use the information we hold. The product information on this website is not intended to imply any recommendation or opinion about a financial product listed. Consider your personal circumstances and obtain professional advice before you commit to, or purchase, any particular product.
1NobleOak Whitepaper: Life Insurance in Australia, Consumer Behaviour Transformation, January 2018.
3. Based on a 2018 NobleOak survey of 1034 Aussies. Note: life insurance brands offer income protection insurance as a product)
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