Protect yourself with $1 million life insurance policies from Australian insurers.
One of the most difficult aspects of getting a life insurance policy is deciding how much cover you need. This requires you assessing your personal situation including any outstanding financial obligations that would need to be managed in the event of your death.
Each provider will have limits for the amount of cover that they are willing to provide you with. The amount of cover you can get will depend on your occupation, health and any other characteristics that may influence the insurer's decision to provide them with cover.
Compare cover from some of these direct brands
Which life insurers offer $1,000,000 in cover?
|Provider||Insurance Type||Product Name||Minimum Cover||Maximum Cover||How to Apply|
|Life Cover||AIA Priority Protection - Life Cover Plan||No minimum||$ 1000,000||Enquire|
|Life, Trauma and TPD Cover||AMP Flexible Lifetime Protection – Death, TPD, Trauma||No minimum||$ 1500,000||Enquire|
|Life Cover||Asteron Life Insurance (Death Cover)||No minimum||$1,000,000||Enquire|
|Life Cover||BT Term Life||No minimum||$1,000,000||Enquire|
|Life Cover||ClearView LifeSolutions Life Cover||$50,000||No maximum||Enquire|
|Life Cover||Comminsure Life Care||No minimum||Unlimited||Enquire|
|Life Cover||Macquarie Term Life Cover||$100,000||No maximum||Enquire|
|Life Cover||MLC Life Cover||$25,000||No general maximum though conditions may apply for cover over $15,000,000||Enquire|
|Life Cover||OnePath OneCare Life Cover||No minimum||$5,000,000||Enquire|
|Life Cover||Suncorp Life Protect||No minimum||$1,000,000||Enquire|
|Life Cover||TAL Accelerated Protection - Life Insurance||No minimum||$1,500,000||Enquire|
How much does $1 million life insurance cover cost?
It's hard to give an exact amount for what you will pay each year for $1,000,000 in cover as the premium for each person can vary greatly based on their details. However, cover for a low-risk applicant in their 60s looking for $1,000,000 will usually cost between $2,000 and $3,000 each year.
Age has a great impact on the premium you will pay, which is why it helps to take out cover when you are younger. As an example, a 35 year old non-smoking male in a low risk occupation looking for $500,000 in cover for will generally pay between $30 and $50 per month for cover. Direct Insurer NobleOak recently displayed estimate quotes for cover for a non-smoking architect looking for $1,000,000 in cover:
|35||$489 per year||$287 per year|
|45||$872 per year||$604 per year|
|55||$2004 per year||$1198 per year|
What impacts how much my $1,000,000 life insurance policy will cost?
While the section above may provide a very broad estimate of what you can expect to pay for cover, your final premium will be determined by a number of key factors:
- The policy you choose. Cost will vary greatly among policies based on the benefits and features that each provides. The Australian insurance market is extremely diverse with both basic and comprehensive cover options available.
- Age. Age plays an extremely important role as older applicants are considered to be a higher risk to insurers. This is especially the case for people over 50 years of age.
- Smoking status. Smokers will pay as much as double in premiums for their cover. If you have not smoked for a period of 12 months you may be recognised as a non-smoker.
- Occupation. Applicants with occupations that carry a greater level of risk will pay more for cover.
- Pre-existing medical conditions. Older applicants may have pre-existing medical conditions that they will need to tell their insurer about. Failure to do so may lead to your policy being rejected in the event of a claim. An insurer will either increase the cost of the cover, exclude the condition from the policy cover or reject the application if the risk is considered too high.
These are just a few of the factors that may impact how much you will pay for a $1,000,000 policy. Speaking to an insurance consultant can help you find insurers that are more likely to offer you affordable cover based on your details. As mentioned previously, insurers will have a minimum and maximum level of cover that can be applied for.
Below are the minimum and maximum levels of cover of providers that applicants can receive quotes for through finder.com.au. It is worth noting that the amounts listed above may be subject to change based on the applicants age and any additional options they have included on their policy. If an insurance provider states that there is a “No Maximum” limit on their policy, they will generally have some exclusions in place sums over certain amounts.
Avoiding being over- and underinsured
One of the most critical steps in taking out life cover is sitting down to take the time to work out your financial obligations and decide on an adequate level of life cover to take out. This can be broken down into three areas:
Once you have reviewed each of these, you should be able to determine your insurance cover gap ie the difference between the cover you have in place and the cover you need to ensure your family does not face any financial stress in the event of your death.
- Mortgage. Calculate the amount withstanding on your mortgage and how long it would take to pay that amount off.
- Other existing loans. Calculate the amount withstanding on other smaller personal loans. This may include your car loan.
- Ongoing rent payments that would need to be covered if your remaining family decided to continue to rent the same property
- Vehicle and transport costs. This may include the cost of weekly fares or petrol
- Utility bills. Consider the home costs that would have to be covered if you were to pass away. This may include electricity and water
- Entertainment and leisure expenses. May include vacations
- Education and childcare. Cost of primary and tertiary schooling for your children or to cover the costs of a professional carer if the surviving parent returns to work
- Weekly food costs
- Home maintenance. Cost of maintaining regular home duties
- After you have determined this total sum, you must then calculate this amount by the total number of years that you would need to cover these expenses
- Assess any insurance that has accumulated through your superannuation
- Benefits you/your family may be entitled to in the event of your death
- Any government benefits that your family may be entitled to
- Payment that could be received after the sale of any assets. This may include personal property or investments
Once you have calculated the total sum of what would be required to be covered in the event of your death, you can then subtract the amount of other cover you may be eligible to receive to arrive at an approximation of an adequate level of cover. It is important to note that there is no perfect science to determining the perfect amount of cover to take out to ensure your family does not endure any financial hardship. It is also worth considering any immediate expenses that your family may need to cover in the event of your death including:
- Funeral costs
- Financial planning
- Legal fees
Some life cover policies will include additional benefits for these expenses for no extra premium.
Should I regularly review my $1 million cover amount?
After spending time determining an adequate level of cover, researching different policy options and then applying for life insurance, many people forget the importance of reviewing their policy further down the track. It is crucial to continue to review your policy as your situation changes to ensure you still have the right amount of cover in place and are not left over or under protected in any areas. Some key events that may lead you to review your policy include:
- Change of occupation or salary
- Decrease or increase in debt such as reduction in mortgage debt
- Birth of another child
- Children become financially independent
- Separation or divorce
- Deterioration of health
An insurance consultant can help you review the cover you have in place to help you either adjust your current policy or look for a more suitable option.
Ready to apply or need help determining how much cover to take out?
If you are ready to start comparing different policy options available from Australian insurers, you can make an enquiry to compare quotes and get in touch with an insurance consultant to help you find suitable policy options. A consultant will help you compare the different policies available that offer adequate cover at an affordable rate.