Life insurance can give the people around you financial security. If you've gotten married, bought your dream house or have a family, now's the time to protect them.
This type of insurance can include death cover, total permanent disability insurance (TPD), funeral insurance and income protection.
Life insurance Australia brand comparison
Updated February 25th, 2020
What is life insurance?
Life insurance provides you with financial protection in life-changing circumstances, usually in the form of a lump-sum payment ranging from $25,000 to $2.5 million. In exchange for financial security, you pay a monthly or annual fee, more commonly known in the insurance industry as a premium. If something serious goes wrong, such as serious injury, illness or death, it can help you and your family cope financially.
Note: If you want cover for multiple situations, make sure you let your insurer or an adviser know during the application process so you can get the right cover included.
Get a life insurance quote
Get a quote by using our quick and easy life insurance quote tool - it only takes 30 seconds. Fill in a couple of questions about yourself, select the level of cover you need and get live prices today. You can also speak to an advisor for help.
How does life insurance work in Australia?
Generally, there are three different ways to purchase life insurance:
1. Go through an adviser. This kind of cover, known as retail cover, is usually recommended through a financial adviser. Your adviser will assess your current financial situation, compare options from a variety of insurers and determine the type of cover you need. The advantage of doing it this way is that you can get some expert advice and help working out what kind of cover you need as well as access to a wider range of different policies. The downside is that it often costs more.
2. Find your own policy. You can compare policies yourself, work out what kind of cover you want and determine which one is right for you. This gives you the advantage of being able to pick out almost any kind of cover and find exactly what you're looking for. Generally, it can get you cover equivalent to what you're able to find with an adviser but more cheaply. However, making sure you've found the right cover can be time-consuming, complicated and difficult.
3. Get it through superannuation. Superannuation life insurance is a special kind of life insurance that is often included in your superannuation automatically. Here, you pay your premiums through your superannuation contributions. The main advantage is that it can be cheap cover but you generally have limited options and it might not pay a big enough lump sum in the end to properly cover you.
If you pass away or become ill or injured and can no longer work, most life insurance policies will pay out a lump sum. This ensures that your family continues to enjoy the same financial standard of living as before. A lump sum payment can cover expenses including:
Loan repayments e.g. mortgage, rent and car payments
Everyday living expenses and bills
School fees and expenses for your children
Any other outstanding debts
Life insurance price comparison
To give you a benchmark of pricing, in December 2019, we researched 8 direct life insurance brands to compare quotes for a non smoker with no medical conditions. You can see the results below to give you a rough estimate.
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Life insurance pays out a benefit to your loved ones if you die. This payment can be used to pay off the mortgage and for any ongoing expenses your family has.
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How to buy life insurance
There are three common ways to buy life insurance: superannuation, retail or direct.
Around 50% of Australians hold insurance through their superannuation. That's because most super funds offer life insurance to their members. However, life insurance through your super has a few drawbacks:
It's usually cheaper as super funds purchase insurance policies in bulk.
It can provide you with adequate cover if you don't have a lot of money.
Some funds automatically accept you without a health check.
You only receive limited death cover. Super cover isn't tailored to your needs. For example, you might only receive a lump sum of $100,000 or $200,000 when you die. That means you risk being underinsured.
You probably won't get trauma cover through your super. This means that if you're seriously injured or ill, there's no safety net.
It can affect your pension. The cost of insurance premiums are deducted from your super balance, so you're effectively reducing your retirement funds.
Your income protection insurance is only tax deductible if you take out a policy outside of your super.
This is insurance without the middleman. It's usually sold to you online, via the TV, with your credit card account or with a personal loan.
It can be a good option for those in good health.
If you're happy to do it yourself, you don't need to deal with an adviser.
Some providers, such as NobleOak, offer fully medically underwritten cover.
It can be an issue if you have a pre-existing health condition. A lot of insurers medically underwrite at claim time.
Sometimes the death cover is not tax deductible.
This type of cover provides the largest and most comprehensive safety net. You need to receive financial advice from a financial adviser to obtain this type of policy.
It's fully medically underwritten. The insurer will check your medical history, then agree to issue the policy.
It's quick if you need to claim.
The policies are guaranteed to renew as long as you keep paying.
You're able to lock in the price at your age of application so the cost won't increase as you age – another reason why the earlier you get it, the better.
It can be funded by your superannuation to ensure maximum tax effectiveness.
The application process can take some time if you have any health issues, as the insurance company needs to contact your doctor and clarify information, as well as go back and forth with a financial adviser.
Because it's the most comprehensive, it's usually more expensive than direct or through your super.
Key features you should check when comparing life insurance
Consider the following when comparing life insurance policies:
The lump sum. This is the amount you will be insured for. To calculate your lump sum, take stock of everything you pay for and would need to pay for in the future. These calculators may help.
Waiting periods. This is the amount of time that you need to wait before you can claim on your life insurance. The longer the waiting period, the lower the premium cost, but this can come with risk.
How to get a life insurance quote without giving personal information
You don't need to divulge personal information to get a life insurance quote. You can use the Finder life insurance calculator to find out exactly how much life insurance you need so can shop around for the best deal. Factors that will be taken into account when calculating your life insurance quote include:
Your health, including pre-existing medical conditions
Where you live
If you smoke
The policy that you choose
Your premium structure e.g. stepped or level premiums
How to get cheap life insurance
You can still get cheap life insurance without compromising on quality. The key is to know what to look for and to understand your personal needs. For example, you can avoid extras like trauma cover if you're just looking for basic life insurance.
Another essential tip: compare! Life insurance is a big commitment, so it's worth taking the time to find a policy that offers good value for your money. This means shopping around and reading the fine print. There's no point in getting a cheap policy if it can't adequately take care of your finances when the time comes.
Get in touch with a life insurance advisor
An adviser can help you find cover from trusted life insurance brands.
When it comes to finding the best life insurance, everyone's needs are slightly different. Regardless, there are a few key things you can keep an eye out for and if you follow these tips you'll be well on your way:
Don't fall for a well-known brand. Just because you've seen their ads doesn't mean they're necessarily the best life insurer. Instead, look for policies that suit your specific circumstances. Do you have a lot of people depending on you? It might be best for you to purchase life insurance through a financial advisor. Are you young? Then be sure you opt for level premiums.
Compare! It might seem obvious but this is probably the most important part of buying life insurance. When you shop around, you'll build a clearer understanding of what is best for you. Don't rely on one website either (even Finder!) and use online tools to your advantage (like our life insurance calculator). It's not fun but by setting aside some time to fill in quotes and compare, you're more likely to find a better deal.
Read the PDS. Make sure you understand what you're covered for. Otherwise, you risk being underinsured and leaving things in a bit of a mess if something does go wrong. You won't have to do it often, so put the time in now and have peace of mind for the future.
Who offers life insurance in Australia?
Check out the table below to see some of the brands that offer life insurance in Australia and find out how to buy a policy and whether medical information is required.
Unlike some other comparison services, Life Insurance Finder is independently owned and operated. Any life insurers that 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.
More than just comparison.
We believe in providing you with informative guides so you aren't just blindly comparing policies based on price alone. Empower yourself and make your choice using knowledge that will help you even after you purchase.
Insurance covers you for things that you can't control, which is why you're not generally covered if you lose your job. After all, you can get another one. Having said that, many of Australia's insurance brands now provide combined cover for involuntary redundancy.
If you rely on an income to live, you may still want to protect this. Your income is your biggest asset so, just as you insure your car, you may want to consider income protection insurance (cover if you can't work for a temporary period of time) and TPD insurance (cover if you can't ever work again).
In short, yes. This can seriously affect your premiums and lead to reduced coverage.
Child cover policies are available for any healthy child over the age of 2. The maximum you can insure your children for is $200,000. This would cover things like medical expenses and allow parents to take time off work should their child become seriously unwell.
You can receive a quote for life insurance by entering your details in the form above. A certified insurance consultant will then call you to discuss different policy options and provide you with a preliminary quote based on these details.
Both buying direct and using an insurance broker or adviser have their pros and cons.
They may be able to find policies that you couldn't find by yourself.
They can compare more options and assess for extras.
They are able to liaise with the insurers, negotiate deals and find bargains.
They can offer a wealth of advice and information, and answer any questions you have.
There are a few different ways to arrive at the right sum insured:
Get an estimate from a self-assessment calculator.Calculators can help you add up all of your financial obligations that would need to be covered in the event of your death. This may include mortgage/debt repayments, education fees and everyday living expenses.
Consult a financial adviser or insurance broker. They can help you conduct a more detailed cost analysis to help you plan for your family in the longer term and in more detail.
Insurers class anyone that has smoked tobacco or any other substance in the last 12 months as a smoker.
Some life insurance companies require you to undergo medical or blood tests before you can sign up for cover. Generally, however, most insurers will only require medical or blood tests at application if you are over a certain age or you have a pre-existing condition that needs to be assessed further. Additional evidence may be required in the event of a claim.
If you are in good health and do not have any pre-existing conditions then the most suitable policy for you is probably one which requires testing. If you are in poor health or have pre-existing conditions then you will probably not benefit from a policy which requires testing.
It depends on the condition and the treatment. Every insurer has different conditions for pre-existing conditions so it is best to check the PDS before taking out cover. If the insurer decides that your pre-existing medical condition presents too great a risk for them, they will generally exclude it from cover. For example, if you are applying for cover and have a history of back problems, your insurer may exclude all claims related to back conditions from your policy.
There are generally two options available to you:
It might be worth speaking with an insurance consultant to see if there are any other companies out there that are willing to provide you with cover. Assessment criteria vary between insurers so it's always worth looking around if you have struggled to get cover due to a medical condition.
You may also be able to have your current insurer review your condition when it comes time to renew your policy to see if the exclusion can be lifted if your situation has changed.
Yes. You can apply to increase or decrease your cover at any stage to meet your needs. It's worth noting that you will be required to undertake another round of assessments with your insurer.
Yes. Most policies offer a 30-day cooling-off period whereby premiums paid during this period will be refunded. No premiums will be refunded if you cancel your policy after the cooling-off period.
Generally, all deaths except for suicide are covered within the first 13 months of the policy. Accident-only life cover will only provide cover for death that is the result of an accident. Some policies may exclude deaths related to pre-existing medical conditions for a set number of years from the start date of the policy.
Most policies will not pay a benefit for claims arising from:
Intentional self-inflicted injury or self harm
Acquiring HIV, AIDS, Hepatitis B or Hepatitis C, unless if acquired through performing the duties of your occupation
Disablement caused during engagement in the armed forces of any country
Pregnancy, uncomplicated childbirth or miscarriage
Engagement in unlawful acts
Aviation activity unless you are a fare paying passenger on a scheduled flight
Yes. Most policies provide cover 24 hours a day anywhere in the world. Countries that have been advised against travel are generally not covered.
In the event of your death, your life insurer or super fund trustee will pay out the nominated death benefit to one or more of your financial dependents or to your estate. A "binding nomination" can ensure the benefit from the cover in your super is paid to the beneficiary of your choice. You should make sure your estate has the necessary documentation so that they can claim on your behalf (see below).
If you have life insurance through your superannuation and are concerned about who will receive the benefit payment, you can make what is known as a binding death benefit nomination. A binding nomination allows you to nominate exactly who will receive what in the event of your death, essentially making your Estate Planning more certain.
A binding nomination can be taken out on:
Your current spouse
Youe child of any age
People that are financially dependent on you at the time of your death
The benefit payment can also be distributed among the different beneficiaries, provided that you give the details of the share that you wish to be given to each beneficiary.
Generally, the beneficiary will need to provide:
A completed claim form
The original policy document and policy schedule
A copy of the deceased's birth certificate
A certified copy of the deceased's will
Probate or letters of administration
Most policies allow you to nominate up to five (5) beneficiaries under your policy.
If you claim for injury or illness on a life cover policy, your benefit will be reduced by the amount paid and your premiums adjusted accordingly.
If your premiums are becoming too expensive or if you're going through financial hardship, there are options to freeze your premiums for a short period of time. You should contact your insurer to discuss your options. If you don't reach out to your insurer and your premiums go into arrears, you run the risk of your policy being cancelled.
*Based on quotes taken out through insurer websites and using our quote engine. AIA Priority Protection life cover for a female for $500,000 of life cover. Prices may vary based on your age. Last checked May 2019. Picture: GettyImages, Icons made by Smashicons from www.flaticon.com
Gary Hunter is a writer at Finder, specialising in insurance. He has a Bachelor of Arts in English Literature from the University of Glasgow and has previously worked for Real Insurance as a content specialist.
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