How are death insurance premiums calculated?

Your death insurance premiums are calculated based on several factors. These typically include your age, gender, occupation, health and medical history, lifestyle choices such as smoking or dangerous hobbies and the amount of cover you choose. The type of premium structure you select also plays a role.

What is the difference between stepped and level premiums?

Stepped premiums increase annually as you get older, becoming more expensive over time. Level premiums remain relatively constant throughout the life of your policy, not increasing with age but usually adjusting for inflation. While level premiums might start higher, they can be more cost effective over a long period.

Are there any exclusions to death insurance coverage?

Yes, like most insurance policies, death insurance policies have exclusions. Common exclusions can include death as a result of self inflicted injury, engaging in illegal activities or war. Some policies may also have waiting periods or specific exclusions related to pre-existing medical conditions or dangerous occupations. Always read the Product Disclosure Statement PDS carefully.

Is the death insurance payout taxable?

Generally, if your death insurance is held outside of superannuation, the lump sum payout is tax free for your beneficiaries. If the policy is held within a superannuation fund, the tax treatment can be more complex and may depend on factors such as the age of the beneficiary and their relationship to you. It is advisable to seek financial advice.

Can I hold death insurance through my superannuation fund?

Yes, many Australians hold death insurance through their superannuation fund. This can often be a cost effective way to get cover as premiums are paid from your super balance. However, policies held in super can have different terms, conditions and tax implications compared to policies held outside super.

Who can I nominate as a beneficiary for my death insurance?

You can usually nominate almost anyone as a beneficiary for your death insurance policy, including your spouse or partner, children, other family members or even a legal entity. It is important to make sure your nomination is valid and up to date, especially after significant life events like marriage divorce or the birth of a child.

Do I need a medical exam to get death insurance?

Whether you need a medical exam depends on the insurer, your age, the amount of cover you are applying for and your medical history. For higher sums insured or if you have certain health conditions, an insurer may request a medical examination, blood tests or a report from your doctor. Some policies offer simplified underwriting with no medical exams.

Can I get death insurance if I have a pre-existing medical condition?

It is often possible to get death insurance if you have a pre-existing medical condition, but the terms of the policy might be different. Insurers may apply an exclusion, impose a loading (increased premium) or offer cover with a waiting period related to that specific condition. In some cases, if the condition is severe, cover may be declined.

What happens if I stop paying my death insurance premiums?

If you stop paying your death insurance premiums, your policy will typically lapse after a grace period. This means your cover will end and your beneficiaries will not receive a payout if you pass away. It is important to maintain regular premium payments to keep your policy active.

How do my beneficiaries make a death insurance claim?

To make a death insurance claim, beneficiaries typically need to contact the insurer directly. They will usually be required to provide the policy number, a certified copy of the death certificate and proof of their identity. The insurer will guide them through the process, which may involve further documentation and assessment.

Death Insurance

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Finder Score	Funeral Benefit	Optional TPD Cover	Minimum cover	Maximum Cover	Terminal Illness Benefit	Underwritten
Finder score 9.9 Excellent TAL Accelerated Protection Life Insurance Finder Award	Finder score 9.9 Excellent	Funeral Benefit $25,000	Optional TPD Cover $3 million (maximum cover)	Minimum cover N/A	Maximum Cover No set limit	Terminal Illness Benefit Yes	Underwritten Yes	Discount: Get up to 15% off your TAL Life, TPD or Critical Illness policy with the TAL Health Sense Discount. Eligibility criteria apply. T&Cs apply.	Our verdict: One of Australia's leading life insurers. Automatically includes child critical illness cover. Plus, it comes with a level premium option (e.g. costs remain similar as you get older).	Get Quote View details Compare product selectionCompare	loading
Finder score 9 Excellent Medibank Life Insurance	Finder score 9 Excellent	Funeral Benefit $15,000	Optional TPD Cover $1.5 million (maximum cover)	Minimum cover N/A	Maximum Cover $2.5 million	Terminal Illness Benefit Yes	Underwritten Yes	Discount: Get 10% off when you purchase by 30 November 2026. T&Cs apply.	Get Quote View details Compare product selectionCompare	loading
Finder score 8.5 Great ahm Life Insurance	Finder score 8.5 Great	Funeral Benefit $15,000	Optional TPD Cover $1 million (maximum cover)	Minimum cover N/A	Maximum Cover $1.5 million	Terminal Illness Benefit Yes	Underwritten Yes	Discount: Get your first month free. Purchase by 30 Nov 2026. Plus, ahm health members save 10% each year. T&Cs apply.	Get Quote View details Compare product selectionCompare	loading
Finder score 9.5 Excellent NobleOak Life Insurance	Finder score 9.5 Excellent	Funeral Benefit $25,000	Optional TPD Cover $5 million (maximum cover)	Minimum cover N/A	Maximum Cover $25 million	Terminal Illness Benefit Yes	Underwritten Yes	Discount: Get 2 months free with NobleOak Life Insurance. Offer ends 30 Nov 2026. T&Cs apply.	Our verdict: Highly commended in the 2026 Finder Life Insurance Awards, offering up to $25 million in life cover, one of the highest payouts available.	Get Quote View details Compare product selectionCompare	loading
Finder score 7.5 Great AAMI Life Insurance Most Loved	Finder score 7.5 Great	Funeral Benefit $10,000	Optional TPD Cover	Minimum cover N/A	Maximum Cover $1.5 million	Terminal Illness Benefit Yes	Underwritten Yes	Discount: Get a $100 first year discount when you take out a new AAMI Life Insurance policy. T&Cs apply.	Our verdict: There’s flexibility with AAMI as you can add another adult to your cover, with a competitive limit of $1.5 million. Easy application process with no medical exams.	Get Quote View details Compare product selectionCompare	loading
Finder score 7 Great HCF Life Protect Insurance	Finder score 7 Great	Funeral Benefit $15,000	Optional TPD Cover	Minimum cover N/A	Maximum Cover $1.5 million	Terminal Illness Benefit Yes	Underwritten Yes	Discount: Get 6 weeks free with HCF Life Insurance. Offer ends 10 Nov 2026. T&Cs apply.	Our verdict: Similar cover to other insurers ($1.5 million). A good discount for HCF members of 10% and an easy initial quote process.	Get Quote View details Compare product selectionCompare	loading
Finder score Not scored yet Australian Seniors Life Insurance	Finder score Not scored yet	Funeral Benefit	Optional TPD Cover	Minimum cover N/A	Maximum Cover $0.2 million	Terminal Illness Benefit Yes	Underwritten Yes	Our verdict: Australian Seniors lets you take out cover up to the age of 79. No medical exams or blood tests needed to apply. Keep in mind: Low cover limit of up to $200,000 and no option to add TPD or Trauma cover.	Get Quote View details Compare product selectionCompare	loading
Finder score Not scored yet Real Life Insurance	Finder score Not scored yet	Funeral Benefit $20,000	Optional TPD Cover $1 million (maximum cover)	Minimum cover N/A	Maximum Cover $2 million	Terminal Illness Benefit Yes	Underwritten Yes	Discount: Get 10% cash back of the premiums you’ve paid after your first 12 months with the Real Reward™ . T&Cs apply. .	Our verdict: The application is simple; it can be done with 1 phone call and there are no medical exams.	Get Quote View details Compare product selectionCompare	loading

Showing 8 of 8 results

One third of Australians lack loved one financial safeguards; death cover provides a lump sum for family expenses.
Assess your needs considering income, debts and family expenses to choose between term, life or funeral cover.
Death cover helps with mortgage, education and daily living costs, or add TPD for injury protection.

Finder Score - Life Insurance

Life Insurance is a little complicated and a lot overwhelming. That's why we made the Finder Score, to make it easier to compare Life Insurance products against each other. Our experts analysed over 30 products and gave each one a score out of 10.

But a higher score doesn't always mean a product is better for you. Your situation is unique, so your policy choice will be too. Don't think of Finder Score as the final word, but as a good place to start your life insurance comparison.

Read the full methodology

Why compare insurance with Finder?

You pay the same price as buying directly from the insurer.
We're not owned by an insurer (unlike other comparison sites).
We've done 100+ hours of policy research to help you understand what you're comparing.

What is death insurance cover?

Death insurance cover, sometimes called life insurance, pays a lump sum to your beneficiary (or beneficiaries) if you pass away.

Death cover can bring peace of mind for you and your family. It can help secure your family's future and ensure they don't need to face the burden of financial uncertainty while simultaneously coping with grief.

Lump sum payments in the event of death or terminal illness
Advance payments to help cover the immediate costs
Financial planning and counselling benefits for your family
Benefit payments available in the event of serious injury or illness

Did you know?

A recent Finder survey revealed that a third (34%) of Australians have no financial safeguards in place for their loved ones if they were to pass away suddenly.

What type of expenses am I covered for?

Some of the expenses that death cover can provide relief for, include:

Rent or mortgage repayments
Children’s education expenses
Daily living expenses and needs, such as food and clothing
Costs to hire housekeeper or nanny

Home maintenance costs
Funeral expenses
Legal expenses
Estate settlement costs

How do I determine my life insurance needs?

There isn't one death cover that is ideal for everyone, which is why it is important to assess and compare different policies to determine which plan would be most suitable for you and your family's needs. Here are a few things to consider when calculating the right amount you need:

You current annual income. Replacing your lost income for the years required
Short-term and long-term debts. This often includes mortgage, credit card debts, personal loan, and car loan
Your immediate expenses. This includes food, clothing and shelter (rent payments, if you don't own your home)
Your children's education expenses. Consider the number of children you have and their respective ages to determine the total amount of expenses
Emergency funds. Work out how much of your expenses such as a funeral arrangement, medical treatments, legal fees and estate settlement costs can be covered by your savings.

You can use a life cover calculator to give you an indication on how much you may need for a death cover. If you want further guidance, an experienced death cover agent can help you in determining an ideal amount that will match your needs situation, as well as providing tailored advice on life policies that suit what you require.

Speak to an insurance specialist to help you find personalised cover

What forms of death cover are available?

The two main types of life insurance are term life insurance and funeral cover, both of which can pay out the full sum insured on death. If you are not eligible to obtain term life insurance (such as due to medical conditions or age), a funeral plan may be a good option.

Type	Details
Term life insurance	Helps provide for one's partner or family in years to come. Can be adjusted over the years as you enter different life stages and your financial needs and obligations change. Generally a more flexible and detailed type of cover than funeral insurance. Choose from a wider range of benefits and payout conditions that suit your needs. Often significantly higher maximum benefits than funeral insurance.
Funeral plans	You can take out a specific amount of cover, such as $8,000, which is paid to your beneficiary when you die and can be spent at their discretion. Can cover administrative costs and mortuary fees, and the funeral itself. You can generally have two people on the same funeral plan, and should either one pass away, the other can receive the benefits.

Term life insurance

Helps provide for one's partner or family in years to come. Can be adjusted over the years as you enter different life stages and your financial needs and obligations change.
Generally a more flexible and detailed type of cover than funeral insurance.
Choose from a wider range of benefits and payout conditions that suit your needs.
Often significantly higher maximum benefits than funeral insurance.

Funeral plans

You can take out a specific amount of cover, such as $8,000, which is paid to your beneficiary when you die and can be spent at their discretion.
Can cover administrative costs and mortuary fees, and the funeral itself.
You can generally have two people on the same funeral plan, and should either one pass away, the other can receive the benefits.

Death cover for different life stages

You're relatively young and healthy and your premiums are reasonably low. You might be single, or you might have a family and dependents and can find a level of cover to suit.
As your responsibilities grow you will typically be adjusting your policy and increasing your level of cover later on. Here, additional disability cover with term life insurance can deliver an important extra layer of protection for you in the event of life-changing accident or illness.
You may be married with children and you might be bearing more financial obligations. Investments and debt can also make up a significant portion of your finances which should be considered when comparing life insurance policies or adjusting cover.
If you don't have children already, you may be planning for kids in the future, and their age will determine how far ahead you need to plan for their education expenses.
Disability can be just as significant a concern as death, putting you and your family in a difficult position. With more assets, costs and dependents, as well as your retirement to think about, a comprehensive and versatile life policy can be important in this life stage.
At this point, if you have children, they will likely have moved out and you would be looking towards retirement. Protecting your investments and assets through life insurance may be an important part of retirement planning, and paying off the mortgage and other debt before retirement is also a concern.
Don't underestimate the level of cover you might need in order to provide for a long retirement spanning several decades. Consider your children's circumstances when looking at policies, as well as the likelihood of your partner being able to return to the workforce if something happens.
After retirement, your financial obligations will generally have decreased, but naturally so has your income. You can get cover to help you keep up with your plans, such as travelling, in line with your financial capacity. The assets you've spent a lifetime building may need to be protected, and any financial obligations towards your partner or other dependents.
Estate planning and aged care costs can be worth considering, as are growing medical expenses or costs relating to other health needs. Financial planning might also be important to consider, specifically in the form of estate tax mitigation and budgeting for an extensive retirement with many years ahead.
Finding a policy to match your budget and help maintain your lifestyle while protecting important obligations depends largely on your circumstances, such as your age of retirement and current income from assets.

Can death cover pay for accidents and injuries?

In the event of a fatal accident or injury, death cover of both types, funeral plans and term life insurance, can pay out, while some benefits may also be available for survivable accidents or injuries, although these are generally only available with term life insurance policies.

The accidental death benefit available with term life insurance policies can pay out an additional amount should your death be the result of an accident, in order to help compensate for the suddenness of the event and additional costs that may be associated. This may only be available with term life insurance policies.
For severe but survivable accidents you may also be able to link additional forms of cover to your policy including:
- Trauma, serious injury or serious illness cover: In the event of specified health events you can get paid lump sum benefits. The specific events covered will vary between policies, but can include cardiac arrest, cancer, loss of limbs, blindness, heart surgery and many others.
- Total and permanent disablement or income protection insurance: Should you suffer an accident, injury or illness that leaves you permanently disabled, this type of policy can pay benefits. Depending on the type of cover, disabled might be defined by an inability to work, an inability to perform specific tasks or a percentage measurement of disability based on your physical injuries and loss of function.

What is funeral cover?

Funeral cover is an insurance product that gives your family a lump sum when you die so they can pay for your funeral without worrying about the hefty costs.

If you are in the older age group and have little debt, you may want to consider a funeral plan that will take care of your funeral costs.

Frequently asked questions

Yes, like most insurance policies, death insurance policies have exclusions. Common exclusions can include death as a result of self inflicted injury, engaging in illegal activities or war. Some policies may also have waiting periods or specific exclusions related to pre-existing medical conditions or dangerous occupations. Always read the Product Disclosure Statement PDS carefully.
Generally, if your death insurance is held outside of superannuation, the lump sum payout is tax free for your beneficiaries. If the policy is held within a superannuation fund, the tax treatment can be more complex and may depend on factors such as the age of the beneficiary and their relationship to you. It is advisable to seek financial advice.
You can usually nominate almost anyone as a beneficiary for your death insurance policy, including your spouse or partner, children, other family members or even a legal entity. It is important to make sure your nomination is valid and up to date, especially after significant life events like marriage divorce or the birth of a child.
Whether you need a medical exam depends on the insurer, your age, the amount of cover you are applying for and your medical history. For higher sums insured or if you have certain health conditions, an insurer may request a medical examination, blood tests or a report from your doctor. Some policies offer simplified underwriting with no medical exams.
It is often possible to get death insurance if you have a pre-existing medical condition, but the terms of the policy might be different. Insurers may apply an exclusion, impose a loading (increased premium) or offer cover with a waiting period related to that specific condition. In some cases, if the condition is severe, cover may be declined.

Thank you for your feedback!

Written by

James Martin

Journalist

Add to Preferred Sources

James Martin was the insurance editor at Finder. He has written on a range of insurance and finance topics for over 7 years. James often shares his insurance expertise as a media spokesperson and has appeared on Prime 7 News, Insurance News, 7NEWS and The Guardian. An experienced journalist, James' work has featured in publications including The Irish Times, Companies100 and In Business. He holds a Tier 1 General Insurance (General Advice) certification and a Tier 1 Generic Knowledge certification, both of which meet the requirements of ASIC Regulatory Guide 146 (RG146). See full bio

James's expertise

James has written 167 Finder guides across topics including:

Car, home, life, health, travel and pet insurance
Managing the cost of living
Money-saving tips

Co-written by

Richard Laycock

Editor

Richard Laycock is Finder’s insights editor after spending the last five years writing and editing articles about insurance. His musings can be found across the web including on MoneyMag, Yahoo Finance and Travel Weekly. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance. See full bio

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Death Insurance

Death insurance, also called life insurance, pays a lump sum (for example, $1 million) if you pass away during the policy's term. It means your loved ones can meet ongoing expenses, such as the mortgage.