What's the best life insurance on the market?
The best life insurance on the market is dependant 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 with a wife and three kids, who also smokes regularly.
As a general guide, we've listed the top three life insurance companies in Australia by market share and the most popular brands on finder.com.au below.
There also some are some easy things you can do to find the policy that is most suitable for you:
- Compare the 'best' for various categories. You can do this by comparing market share and a company's financial strength, as well as reading guides for specific situations.
- Learn how life insurance actually works. See what's crucial in a policy.
- Understand your what you need. Look at your life stage and consider your personal needs.
Life Insurance Publisher for finder.com.au
Market share: 17.70%
Average premium: $23.48
Market share: 15.20%
Average premium: $21.57
Market share: 12.20%
Average premium: $25.58
Based on market share for March 2018, Strategic Insight. Cost of premiums were taken from our quote engine.
Most popular direct brands on finder* (2018)
'Most popular direct brands' was based on clicks from finder.com.au to direct insurer websites from 1 January to 7 May 2018. You can learn more about the numbers here.
This depends on what factors you are accessing. We've looked at our own data and research from different expert publications to give you a high level idea of what could be the "best".
Best life insurer - market share (2018)
- Source: Strategic insight. Learn more.
- Source: Roy Morgan. Learn more.
Insurer with the strongest financial rating (2017)
- Source: Standard & Poors. Learn more.
Best life insurance for specific circumstances
A guide to getting life insurance as a senior. Read more…
Here are some of the health reward programs and discount schemes available from Australian life insurance brands. Read more…
Advice on how to get valuable life insurance cover for pre-existing medical conditions ✓ Compare policies online ✓ Read more…
One way to look a the best life insurer is by considering the market share of an insurer. We looked at "Total risk premium inflows" and found TAL with the largest market share in Australia (as of 2018).
|OnePath Australia Group||10.1%|
|BT / Westpac Group||7.70%|
Market share based on Total Risk Premium Inflows ending in March 2018. (Strategic Insight).
Standard & Poors is an independent body that looks at the financial strength of life insurers in Australia. A company with solid financial solvency tells you how worthy they are from a credit standpoint. This gives you an idea of whether a company will be able to pay claims today and later down the track.
A triple A (AAA) rating is the highest available rating.
|AIA Australia Ltd||A+|
|Challenger Life Company Ltd.||A|
|Colonial Mutual Life Assurance Society Ltd. (The)||A+|
|MetLife Insurance Ltd.||A+|
|OnePath Life Ltd.||A+|
|Suncorp Life and Superannuation (Owner of Asteron Life Insurance).||A|
|Westpac Life Insurance Services Ltd.||A+|
|Hallmark Life Insurance Co. Ltd.||BBB+|
Standard & Poors conducted a study in November 2017
What do the rankings above mean?
- AA = Very strong financial security but more likely to be affected by adverse business conditions (vs an insurer with a AAA rating).
- A = Strong financial security but more likely be affected by adverse business conditions (vs insurers with higher ratings).
- BBB = Good financial security but more likely be affected by adverse business conditions (vs insurers with higher ratings).
From 1 January to 7 May in 2018, we looked at the popularity of two groups of life insurance brands:
- Those who sell their products on their website "direct".
- Those who sell their products using an adviser "retail".
|Popularity ranking||Brand (sold on its website)||Maximum sum insured||Is the policy fully underwritten?|
|1||NobleOak Life Insurance||$15,000,000||Yes|
|2||Real Life Insurance||$1,000,000||No|
|3||Virgin Life Insurance||$1,500,000||Yes (if you choose "Tailored" cover option)|
Methodology: We analysed six life insurance brands on our panel that sell products directly on their websites. Here are the most popular based on user clicks from our website to respective brand websites.
|Popularity ranking||Brand (sold through adviser)|
|1||OnePath Life Insurance|
|2||AIA Priority Protection|
|3||MLC Life Insurance|
|5||TAL Accelerated Protection|
|7||Asteron Life Complete|
|8||Zurich Wealth Protection|
Methodology: We analysed ten life insurance brands on our panel who sell their products through advisers. Here are the most popular based on inquiries on our life insurance engine.
Roy Morgan analysed 13 of the largest insurers in Australia and found the highest levels of customer satisfaction in Insuranceline, Allianz and AIA Australia.
|Life insurance brand||Customer satisfaction (2017)||Customer satisfaction (2016)||Change|
Roy Morgan Single Source (Australia) December 7 2017
Doing your own research? We asked various members of finder's insurance content team to find out which inclusions were the most important and why.
Richard Laycock - Insurance Editor:
1. A guaranteed future insurability benefit
"A guaranteed future insurability benefit allows you to increase the amount you're insured in the future as your life changes, for example if you get married or have children.
"The real advantage of having this inclusion is that you can increase your cover without having to take a medical reassessment. So if you develop a pre-existing medical condition after you have bought life insurance, you'd still be able to increase your cover.
Maurice Thach - Life Insurance Publisher:
2. Full underwriting (Lifestyle and medical questionnaire)
"If you have a pre-existing medical condition or a dangerous job then you'll want to ensure your cover is fully underwritten. This means your health is checked up-front. While it does take longer, it also means you'll get to know if you're covered when you apply instead of receiving a nasty surprise at claim time.
"Generally, life insurance you buy through an adviser will be fully underwritten. For policies that are direct, only some are fully underwritten".
Zahra Campbell-Avenell - Insurance Publisher:
3. A higher expiry age
"The expiry age is the age you reach where you're no longer covered. A higher expiry age means you'll be able to stay covered for longer meaning there's less chance of outliving your policy. Look for a higher expiry age to ensure the money you pay in premiums doesn't go to waste".
Richard Laycock - Insurance Editor:
4. The right type and amount of insurance for you
"It's possible to miscalculate how much life insurance you need, e.g. taking out $10 million in cover when you only have one child and a house worth $500,000. By the same token, it's possible to take out the wrong insurance cover, eg death cover if you have no one depending on you.
"This is why it pays to use a calculator to work out your needs in terms of both: sum insured and type of insurance".
Maurice Thach - Life Insurance Publisher:
5. A clear understanding of exclusions
"Not understanding what you're not covered for can be detrimental when you actually need to claim. Imagine suffering a major injury, then being knocked back because you didn't realise you weren't covered for the time period for where you worked previously".
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:
|Total and permanent disablement (TPD)||If you suffer total and permanent disability your policy will pay out to cover home modifications, the expense of ongoing assistance, income cover and anything else you spend it on.|
|Trauma cover||Your life insurance policy will pay benefits if you suffer a defined health event listed in the policy, such as heart attack or stroke.|
|Income protection cover||A usually optional extra that can be bundled 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.|
The graph below shows the different insurance needs based on your life stage. This should only be used as a guide as requirements can change depending on your own situation.
Tip: Review your policy regularly
If you already have cover in place, you should review your policy regularly to ensure you are not overinsured or underinsured. Events that can affect your policy include:
- Marriage or divorce
- Buying a new home
- Children moving out or becoming financially independent
- Changes in health
Most advisers recommend that you review your life insurance policy at least once every 12 months. There may be a better-priced and/or more suitable option available.
When taking out a life insurance policy you will need to consider your sum insured. This is the total amount you are covered for and the maximum that will be paid out in the event of your death. The trauma and TPD components of your policy may have their own separate benefit limits or they might share the sum insured with the term life insurance part of the policy.
Some insurers automatically set your sum insured based on your usual income, while others let you choose your own. Either way a higher sum insured means higher premiums, so the best life insurance policy* will be neither too little nor too much.
For a rough idea of how much your sum insured should be
- Multiply your annual salary by ten. This amount should be reasonable if you are the sole income-earner in your household.
- Use a life insurance calculator. This makes it easy to add up different expenses to arrive at an adequate sum to be insured for.
For a personalised recommendation
For a clearer idea of the amount you should insure yourself for, you may wish to get in touch with an insurance consultant. They can help you work out the numbers and decide which additions are right for your needs and which insurers have suitable policies.Back to top
Australian insurance providers use different methods to attract and reward customers. You can usually access both discounts and reward programs from many insurers.
- A multi-policy discount: When you have more than one insurance policy with the same insurer, you often qualify for a multi-policy discount. For example, if you have home and car insurance with a particular insurer, ask if you qualify for a discount for taking out life insurance with them too. You could save around 5% on your premiums.
- Multiple life insurance policies: You can also take out more than one type of life insurance policy to qualify for a discount, for example, if you are a small to medium business owner you can purchase coverage for yourself, your family and your business. These additional insurances can also offer potential tax benefits and savings at tax time.
- Discount for a large sum: If you are insured for a large benefit amount, for example more than $1 million, you may be eligible for a discount on your premiums.
- Making annual payments: If you pay your premiums annually, rather than fortnightly or monthly, many insurers will offer you a discounted rate. In some cases you can save up to 8%, plus you have the ease and convenience of making just one payment, secure in the knowledge you are covered for the entire year.
Rewards programs offers both discounts on your life insurance cover as well as items like gym memberships and fitness devices. In return, you'll need to show a healthy lifestyle.
- Your premiums. For example, if you can show proof of gym membership or evidence of health screening, you often qualify for a discount of around 10% on premiums.
- Extra rewards. Some providers like AIA have a program that can offer up to 50% off Virgin Active, Fitness First and Anytime Fitness memberships.
Although financial advisors aren't essential for taking out personal insurance policies, using an advisor is useful option if you are not comfortable with comparing and applying for a policy by yourself.
Financial advisors can:
- Help you work out how much cover to take out
- Assist you in managing investment and savings components of life insurance where applicable
- Consider whether a life insurance policy fits in with your long term financial plans
The downsides are that there may be additional expenses to using an advisor and they can also be associated with an insurer. In both cases, however, they are required to disclose these things to you ahead of time so you can make an informed decision.
Increasing numbers of Australians take out life insurance policies without the help of advisors. If you are considering a policy without advice, make sure you use online guides to find a policy that works for you.
A few last things to consider
Make sure you avoid these common pitfalls when looking for life insurance cover:
- Ignoring future costs: Think about your current bills and expenses and take into account what these will look like in the future. For example, if you have young children the cost of school and tertiary study is going to be significant in coming years, so make sure you allow for this when assessing what you can afford.
- Forgetting to cover the stay-at-home parent: Life insurance for a stay-at-home parent is also important. Consider points such as how much your family would have to spend on a housekeeper and child care if the parent became ill, was injured or died.
- Putting off taking out cover: Your premiums will only increase with age so think about taking out cover early and securing a competitive rate.
- Going with the cheapest policy: The cheapest policy will usually offer a reduced level of cover. Make sure the premium matches the quality of the cover provided.
- Skim over the terms and conditions: Take time to read the product disclosure statement carefully so you have a clear understanding of exactly what you will be covered for and the necessary conditions for a benefit payment.
Exclusions will vary between policies, but some of the more common things you will find include:
- If the insured event which resulted in a claimable injury was the result of consumption of drugs or alcohol other than prescribed by a doctor and taken as directed
- If the claimable injury, illness or death was the result of a pre-existing medical condition
- If the claim is for a health event such as heart attack or coronary, and you have a body mass index above of a certain level, high levels of blood cholesterol or high blood pressure. These types of exclusions are more common in policies that do not require any medical or blood testing.
- If the claim is the result of suicide or intentional self-injury, either shortly after taking out the policy or ever
- If the insured event was the result of certain high risk occupations such as those which involve working at heights over 15 meters, with explosives, underground in mines, on an offshore oil rig or with the armed forces
- If the insured event was the result of a dangerous pastime like cave or deep sea diving, mountaineering, abseiling, rock climbing or canyoning, or racing cars, motorcycles and other motorised vehicles
You should always look at the exclusions, particularly if your policy does not require medical or blood tests, or is otherwise easier to sign up for. These exclusions are one of the ways some insurers may financially protect themselves from high risk policyholders without requiring tests or examinations prior to signup.
This broadly refers to the ease with which you can adjust your policy and the availability of options, including:
- Adjusting your cover. This may include adding family members, reducing or increasing the sum insured, adjusting for changed circumstances or lifestyle factors and the removal or addition of new cover. Some policies will let you do this at any time, while others may only offer it at renewal or not at all.
- Whether you can put policies on hold. Temporarily pausing your life insurance can stop you from having to pay premiums while looking for a new job or adapting to new financial circumstances, without cancelling your cover altogether.
- The number of potential beneficiaries and the ability to change them. All policies will have a maximum number of beneficiaries, rarely more than five, and flexible policies will let you change these more easily.
- Indexation for inflation. This feature means your sum insured will be automatically adjusted for inflation, typically to a maximum of 5% per year. It’s a good inclusion for long term policies.
This is the highest sum that will be paid out by your insurer, either for a specific event or in total. Some of the limits you may encounter are:
- Lifetime limits. This is the most you can claim from an entire policy, or certain parts of a policy, over its lifespan.
- Individual, partner or family limits. These are the maximum amounts that can be claimed for these groups.
- Per event limits. Most injuries and illnesses covered by trauma insurance will have maximum amounts that will be paid to cover them. Similarly, income protection and TPD insurance will typically have their own maximums
This is whether or not you are able to take out a policy or claim for certain things. For example, some policies might require you to be in a certain age group.
- Age. It can be difficult to take out a life insurance policy over the age of 65 or under the age of 18.
- Health. Many policies will only cover you if you agree to take a medical or blood test first, or at least fill out a questionnaire. Others may forgo these but will have strict exclusions in place to protect them from having to pay out for expected conditions in high risk customers. For example, a very overweight person might be able to take out a policy without medical testing, but it might not cover them for diabetes-related conditions.
- Other family members. Children and partners may have their own separate eligibility requirements on policies that offer cover for them.
* The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms "Best" and "Top" are not product ratings and are subject to our disclaimer. You should consider seeking financial advice and consider your personal financial circumstances when comparing products.