The best life insurance policy depends largely on your personal circumstances, and our best pick may not always be the best for you. To give you a starting point, we reviewed and scored over 20 Australian life insurance policies (and another 14 for income protection).
Finder winners: The best life insurance in Australia
Finder Award Winner: Best life insurance policy overall
NobleOak takes home the Finder Award for the Best Life Insurance in Australia because of its combination of competitive price and strong features.
NobleOak came out on top for its NobleOak Premium Life Direct offering with, on average, the lowest price in the direct market. At the same time, NobleOak's policy has a wide range of features like the option to cover total permanent disability (TPD) and trauma.
What really separates NobleOak Premium Life Direct from the rest of the pack is the maximum sum, as you're able to apply for a death benefit of up to $15,000,000. This is over seven times more than the maximum coverage offered by its closest competitor. NobleOak has one of the higher maximum entry ages, as you're able to take out a new policy up to 69 years of age. It's also one of the few direct policies that come with a counselling benefit.
NobleOak is also the only direct policy that's "fully underwritten" over the phone. This means you'll need to answer a full health questionnaire up-front when you apply. Although it sounds like extra work, this requirement will ensure there are no surprises come claim time (versus a policy that just accepts you automatically).
There are three ways you can purchase life insurance in Australia:
Direct (bought from an insurance brand)
Retail (bought with an adviser)
Super (cover that's included with your superannuation)
Here are the top life insurers in regards to claims outcomes for each category.
We looked at claims data from the Australian Prudential Regulation Authority (APRA) from January 2018 to December 2018 (this is the most recent data available). The tables below focus on "death cover" claims across each purchase channel: retail (adviser), direct purchase with an insurer and purchase through super.
To get the score, we then weighted the following aspects of the claim data:
How often a claim is accepted
The time it takes to accept or deny a claim
The rate of disputes
Best direct life insurer for claims outcomes: ClearView
Direct life insurance is when you purchase directly from an insurer, rather than through an adviser or broker. You can do this online or over the phone. Here's why ClearView Life Insurance bought directly has an excellent claims score.
When it comes to hassle-free and easy claiming, ClearView was at the top of the pack. It accepted 97.7% of claims compared to the industry average of 88%.
The average claims dispute resolution time for ClearView customers is 2.4 months. The industry average is almost an entire month longer at 3.3 months
ClearView also had lower claims disputes than any other direct insurer. For every 100 lives insured, it had an average of 3.8 disputes. The industry average is 15.6 – significantly more than ClearView.
Life insurance bought retail is usually recommended through an adviser. The broker assesses your current financial situation and medical history to determine the level of cover you need. Here's why TAL Life Insurance bought with an adviser has a high claims score.
TAL accepted 98.4% of claims when it came to retail life insurance policies. This is higher than the industry average of 96.3%, making TAL a good choice for those who want less surprises come claim time.
If there is a dispute, TAL is swift to come to a resolution. TAL's average claim dispute resolution time is less than a month. At 0.9 months to be more exact, TAL's resolution time is much shorter than the industry average of 3.1 months.
The industry average for disputes per 100 lives is 7 while TAL came out slightly higher, with a score of 9.2.
Best super life insurer for claims outcomes: MetLife
In Australia, it's often the case that you can buy insurance through your super. Your life insurance through super usually comes as a group policy, which allows you to pay a premium that's standard for all members. Here's why MetLife Life Insurance bought through super has a high claims score.
MetLife accepted nearly all life insurance claims made. With 99.6% of claims accepted, it scored higher than the industry average of 98.2% – one of the main reasons it came out on top for life insurance through super.
When it came to claims dispute resolution time, MetLife performed above the industry average of 1.3 months. Its 0.8 months' claims resolution time is another reason that it was the overall best life insurer for claims outcomes.
MetLife had half the amount of disputes when compared to the industry average. It had 0.4 disputes per 100 lives when compared to the average of 0.8.
One of the big reasons NobleOak took out the Finder Award for Best Life Insurance was because it is fully underwritten.
Having a fully underwritten policy means that the insurer is getting a good look at your health and calculating your premiums accordingly. It also means that there shouldn't be any issues come claim time.
When looking at which policy was the best fully underwritten life insurance policy, we also factored in the maximum sum insured. NobleOak provided the highest maximum sum insured policy by a wide margin.
NobleOak is the only direct life insurance provider that states explicitly on its website that it is fully underwritten.
Best cover for older Australians: TAL Lifetime Protection and Qantas Life Insurance
Getting the best cover as you get older is not so much about the ability to get the most cover dollarwise, but the right amount of cover to suit your changing needs. When looking at which insurer offered the best choices for older Aussies, we looked at three key areas: minimum sum insured, the maximum entry age and the policy expiry age. It turns out that both TAL and Qantas scored well according to our algorithm.
It may sound counterintuitive but as you get older, the amount of cover you actually need gets less and less. Your kids have flown the nest (hopefully) and you no longer have to worry about looking after their day-to-day expenses. However, you might have a little way to go on your mortgage and want to make sure you've got enough to cover it should the worst happen. So, having the ability to take out cover for a low amount can come in handy. Both TAL and Qantas allow you to take out cover starting from as little as $50,000.
Obviously, having the ability to take out the cover in the first place is important, which is why we factored in maximum entry age. Both Qantas and TAL life insurance policies allow customers to take out cover until the age of 74.
Not only is being able to take out cover later in life important but so is how long that cover remains in place. TAL and Qanats allow their customers to hold their life cover until the ages of 100 and 99 respectively.
Life insurance is a very broad term and can offer additional coverage such as total and permanent disability (TPD) insurance and trauma cover. Others provide cover such as counselling benefits and guaranteed renewability. We looked at how well insurers covered these areas and more and found that Guardian Insurance offered the best additional coverage.
When taking out cover with Guardian you have the option to add both trauma and TPD insurance. Guardian even offers a child benefit option.
One of the nice-to-have features of this policy is the ability to suspend premium payments during financial hardship.
While Guardian took out the number one spot, both Real and TAL Life Insurance tied in a close second.
Standout feature: Up to $10,000 of income is covered (to a maximum of 85%)
Virgin scored top marks for its Virgin Income Protection Tailored policy with high benefit and waiting period options as well as redundancy cover as an optional extra. Better still, up to 85% of your income is covered. Despite all these features, Virgin's income protection policy is competitively priced when compared to the rest of the market.
With Virgin Income Protection Tailored, you can choose a benefit period ranging from six months to five years, allowing you to pick the coverage length that suits your needs.
Virgin's Income Protection Tailored policy also comes with redundancy cover as an optional extra, more specifically involuntary unemployment cover. If you want to safeguard your future and that of your family, this add-on ensures you can keep paying the bills and putting food on the table should you be made redundant.
There is no one-size-fits-all best life insurance policy, which is why it pays to compare your options. If you're ready to compare you can use the tables below to review your options or complete the contact form and an adviser will be in touch to walk you through your options.
Life insurance policies will always include a death benefit (life cover), which will pay a lump-sum benefit in the event that you die.
However, you'll also need to decide which of the following extras you would also like to include (e.g. cover for situations like critical illnesses or permanent disability). Your life insurance policy can consist of one or more of the following:
This is an optional extra that you can bundle with life insurance to pay out a portion of your regular income (typically 70-80%) in the event of a sickness or injury that temporarily prevents you from being able to work.
What type of life insurance is best for me?
Consider your life stage
Although there are a number of choices out there, the best life insurance is dependent on your personal circumstances.
For instance, an insurer that has great cover for a 25-year-old with no health conditions won't be the same for a father who smokes regularly and has a wife and three kids.
There are also some easy things you can do to find the policy that is most suitable for you:
* The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.
Richard Laycock is Finder's insurance editor, and has spent the last five years wrangling insurance product disclosure statements. His musings about insurance have appeared on Money Mag, Yahoo Finance, and Travel Weekly. When he’s not helping people make sense of insurance fine print, he is testing the quality of cocktails in his newfound home of New York. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance.
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