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With all the new assets – and possibly people – in your life, you need to think about life insurance when you reach your mid-30s. Because you're still young and healthy, it's probably the best time to buy and lock in cheap premiums that will quickly disappear if you delay.
If you're in your 30s, there are a few different types of life insurance tailored to your needs. They are:
Probably not. If you want enough to cover everything that you currently pay for and ensure that your family continues to enjoy the same lifestyle, then life insurance through super is likely to fall short. In most cases, it will only provide your beneficiaries with between $100,000 and $200,000, which is usually nowhere near enough. Considering that you've likely got a mortgage, school fees, car loans, healthcare and day-to-day expenses to pay, it's generally not enough for the average Australian.
Standalone life insurance, on the other hand, can cover you for more than $1,000,000, which is far closer to the amount your dependants would actually need when you die.
Life insurance is usually very affordable for 35-year-olds, largely because you're still young and likely have little to no health issues. Factors such as your age, health, job and the amount you're applying for will be your insurer's main considerations when determining your premiums.
But let's talk averages to help give you an idea. A non-smoking male, aged 35, is likely to pay around $10 a month for a $500,000 policy or $18 for a $1,000,000 policy. A non-smoking female will pay even less: $8 and $14. The table below gives you a more thorough breakdown and shows you how much more you're likely to pay the longer you put it off.
Age | $200,000 policy | $500,000 policy | $1,000,000 policy |
---|---|---|---|
35 | $3.79 | $7.93 | $14.26 |
40 | $4.70 | $9.92 | $17.83 |
45 | $6.77 | $14.56 | $25.35 |
55 | $18.69 | $37.35 | $69.49 |
65 | $57.11 | $99.89 | $161.09 |
Age | $200,000 policy | $500,000 policy | $1,000,000 policy |
---|---|---|---|
35 | $4.79 | $10.10 | $18.18 |
40 | $6.03 | $12.95 | $23.36 |
45 | $8.89 | $19.34 | $33.60 |
55 | $27.68 | $55.39 | $102.86 |
65 | $94.85 | $170.70 | $287.52 |
We calculated the average monthly costs based on life insurance policies from 8 direct brands in Australia in December 2019. The prices shown in tables are an estimate and are for a single person with no prior medical conditions.
This depends entirely on your personal circumstances, but there are a few simple ways to work it out. Our life insurance calculator can give you an idea of how much you'll need but on average, around $1 to $1.5 million is generally what most people in their 30s need. This is because this is often a new stage in your life when your responsibilities and financial obligations increase.
As a gauge of how much you'll need, it's generally said that your life insurance cover is around 10 times the amount of your annual income. So if you earn $150,000 a year, you'll want to have around a $1.5 million payout.
You can also buy life insurance through an adviser. This will cost you a little more, but that's because they'll do all these bits for you and make sure that you've got cover for the right amount. If that's the way you want to go, you can find a broker here.
When working out how much life insurance you need, make sure you consider everything on the following list:
Still on the fence about whether life insurance at 35 is worth it? Check out the pros and cons:
Pros
Cons
If you've never had a life insurance policy before, then it's worth pointing out some common life insurance exclusions. They're not startling, but they're worth knowing:
Your 30s are usually when you start making big decisions: starting a family, buying a home, getting married. With all these new financial responsibilities, you need to be prepared for the worst. Luckily, buying life insurance when you're in your 30s is one of the most affordable times to do it. It's something you'll need eventually and the longer you put it off, the more expensive it becomes.
Should I keep my life insurance through super?
When you open a super fund, you'll usually automatically be given life insurance with it. You can cancel it if you like, as the premiums you pay from your super are essentially eating into your retirement fund, but you don't need to. It's perfectly acceptable to have more than one life insurance policy and you'll still get the maximum amount from both.
Can I cancel my life insurance?
Yes, you're under no obligation to keep your life insurance policy if it's not working for you any more. If you do cancel though, you will probably forfeit the cheap premiums you were able to get in your 30s.
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