Term Life Insurance

What is term life insurance?

Term Life Insurance is a type of cover that provides a payment:

• To your loved ones if you pass away during the 'term' of the policy (for example before the age of 90)
• To you if you have been diagnosed with a terminal illness and are not expected to live for longer than 12 months

Receive an affordable quote for term life insurance

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Name	Product	Maximum cover	Maximum Entry Age	Minimum Sum Insured	Cooling-off (days)	Expiry Age	Short Description
AAMI Life Insurance		$1,000,000	60	$100,000	30	99	Get life cover up to $1 million.	Get quoteMore info	Compare	loading Fetching your data...
NobleOak Life Insurance 2019 Winner		$15,000,000	69	$50,000	30	99	Get a quote for up to $15 million in life insurance cover. Switch to the Best Life Insurance policy as awarded by Finder and save on average 20% (See NobleOak website for details).	Get quoteMore info	Compare	loading Fetching your data...
Qantas Life Insurance		$2,000,000	74	$100,000	30	99	Join Qantas Life Insurance and earn up to 100,000 Qantas points. T&CS apply including minimum premium and policy hold periods apply to earn points.	Get quoteMore info	Compare	loading Fetching your data...
Real Family Life Cover		$1,000,000	64	$100,000	30	No expiry age as long as premiums are paid	Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™.	Get quoteMore info	Compare	loading Fetching your data...
Zurich Ezicover Life Insurance		$1,500,000	69	$50,000	30	99	Receive a 10% discount on the second person when two applications are submitted at the same time, and both policies are issued.	Get quoteMore info	Compare	loading Fetching your data...
Medibank Life Insurance		$1,500,000	65	$100,000		No expiry age as long as premiums are paid	Get life cover up to $1.5 million. Plus, Medibank health insurance members can save 10% off premiums.	Get quoteMore info	Compare	loading Fetching your data...
nib Value Life Insurance		$1,000,000	65	$100,000	30	80	Receive one month's premiums off every year if you pay annually upfront. T’s and C’s apply.	Get quoteMore info	Compare	loading Fetching your data...
ahm Life Insurance		$1,500,000	65	$100,000	30	No expiry age as long as premiums are paid	Get life cover up to $1.5 million. Plus, ahm health members can save 10% off premiums.	Get quoteMore info	Compare	loading Fetching your data...
Guardian Life Insurance		$1,500,000	64	$100,000	30	No expiry age as long as premiums are paid	Cover up to $1.5 million with Guardian Life Insurance.	Get quoteMore info	Compare	loading Fetching your data...
Insuranceline Life Cover		$1,500,000	65	$100,000	30	99	Tailored life insurance so you know what you're covered for upfront. Take out a policy and get a $100 bonus gift after holding cover for 2 months. T&Cs apply. Ends 31 March 2020.	Get quoteMore info	Compare	loading Fetching your data...

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finder.com.au's comparison of term life insurance quotes

Below is a quick view of how much life insurance can cost you, per month.

_{*Prices are an estimate based on a 35 year old non-smoking male office worker. Quotes last checked on June 2017 and are subject to change. For a closer estimate, enter your details in the form above.}

• Key benefits of term life insurance

  • A lump sum benefit payout. When you take out a term cover policy, you are paying for an agreed benefit amount which will be paid to your family when you die. The term life insurance benefit will be paid as a lump sum amount, so that your family can use the money to pay off debts such as the mortgage or credit cards, as well as use the money as an income to pay ongoing bills to maintain their lifestyle and goals, such as your children’s education.
  • Advance payment for terminal illness. If according to a medical practitioner you are expected to die within 12 months, your policy can pay out the benefit as an advance payment to help with final medical expenses.
  • Can be renewed each year. Most policies can be renewed until you reach the age of 99, however, you may not have to renew your policy after you retire, if you have a healthy retirement investment.
  • Few exclusions for when a benefit won't be paid. Most plans will have just one exclusion, where the policy won’t pay out if your death is the result of suicide in the first 13 months. Apart from that if you have been honest and detailed on your application, your family will usually be able to rely on a cash payout when you die. Obviously there are certain exclusions for when a benefit can be paid for injury and illness claims.
  • Additional options available. Since your death is not the only circumstance which could leave your family unable to rely on your income, and so you can add extras to your term life insurance policy such as total and permanent disability insurance and trauma insurance, which can pay a percentage of your income if you are unable to work because of an illness, injury or accident.

• Main drawbacks of term life insurance

  What are some drawbacks of term cover?

  As with any insurance product, its tailored features can mean that term protection presents certain disadvantages in some circumstances, so make sure you are aware of:

  • No cash value. One reason that term life insurance is cheaper than whole of life insurance is that it doesn’t accumulate an investment portion. This means that your insurance policy does not accrue any cash value, so if you out live the term of your term insurance, and die after the term has expired, your beneficiaries don’t receive any cash out or death benefit. Therefore, if you survive your policy you don’t see any return on the premiums you have paid.
  • Regular renewals and rising costs. As a policy is only valid for the term you’ve chosen, when the policy expires at the end of that term you need to take out a new policy if you want to continue to be covered. However, at the end of the term you are older than you were when you first applied, and may have seen other health and lifestyle changes too, all of which can combine to make renewing your policy more expensive. Plus, term life insurance is not a set and forget insurance product, as you need to go through the application process again and again at the end of each term.
  • Your premium will reflect your lifestyle choices, Your premiums will be based on the level of risk you present to your insurer. If you smoke, engage in high-risk activities or work in a dangerous occupation, you can expect to pay more than others. You shouldn't take ever change who you are or your interests to save on your cover but their may be some changes to make to your health to benefit from a lower premium.

Is whole of life insurance no longer available in Australia?

Insurance companies in Australia no longer offer "whole of life" or universal life insurance in Australia. This type of cover was popular in the 1970s and 1980s but has now been replaced by term life insurance mainly due to whole of life insurance premiums being unable to keep pace with inflation and it being considered to be a poor form of long-term investment.

Do I need term life insurance in Australia?

Despite Australia being a developed country, as many as 95% families with children are underinsured, with around 40% of the population with no life insurance cover in place at all (Lifewise/Natwise, 2010; Comminsure, 2012). Most people are quick to insure their car or home before taking out life or income cover for themselves with 83% of Australians having car insurance in place. (AAMI, 2008).

Why is this the case? People argue that it is because the benefits of term life insurance are less tangible to something like car insurance, with others who choose to push the thought of actually needing life insurance to the back of their mind. When asked why they don't have life cover in place, many people will respond with one of the following:

• "I don't really need it. Do a test and see if you have any needs that could be serviced by cover.
• "Nothing will happen to me." While a sudden death isn't likely, think of what happens in that event.
• "Life insurance is too expensive." There are ways to get cheap cover that allows you to make a small sacrifice for a greater peace of mind.
• "It's just too complicated." Yes, it is a detailed product. However, it's easy to speak to an adviser to clear things up.
• "It's only for families with kids." Not true, there are options for couples as well. Singles can take advantage of products like income protection and TPD.

When is a good time to take out cover?

This will really depend on your own situation and what you would need to cover in the event of your death. Some key triggers that lead many Australians to take out cover or review their existing cover include buying a house, getting married and having their first child. These events may not apply to you but it is still worth considering the "living insurance" that provide a payment if you suffer a major illness or injury and do not pass away.

What is the age limit on Term life insurance?

Age limits for term life insurance varies between brands. The table below shows the maximum age of entry and expiry for term life insurance.

The maximum entry age may also change based on the type of premium you choose and how much cover you apply for. Make sure you know these restrictions before applying for cover.

What expenses can term life insurance cover?

• Replacing an income for your partner or your family that would be lost if you were to die
• Cover mortgage or rent payments
• Cover your child's education
• Cover other personal debt i.e. car loan
• Childcare if your spouse had to return to work
• Funeral costs and financial planning
• Taxes
• Everyday living expenses

How much is it going to cost me?

The amount you pay for cover will depend on a number of factors including;

• Your age - the older you are the more you will pay
• Your occupation - higher risk occupation may mean you pay a higher premium
• Whether you smoke - smokers are considered higher risk and will pay a higher premium
• Gender - rates vary between genders at different ages
• Pre-existing medical conditions - will depend on the nature of condition and current treatment

How much does life insurance cost on average?

Frequently asked questions from our users

• Can I bundle cover?
• Don't I already have cover inside super?
• Is term life insurance tax deductible?
• Can I get cover without doing a medical exam?

Can I bundle term life with other types of cover?

Term life insurance can also be combined with other types of "living insurance" TPD Insurance and Trauma Insurance - these provide a lump sum payment if you become disabled or suffer a trauma event such as stroke, cancer or heart attack.

Don't I already have cover in my superannuation?

Most super funds will provide a very basic level of cover life insurance to members. This is usually only a portion of what will actually be required to cover all of your debts/ongoing expenses of your family if you were to pass away. It is possible to either increase or decrease the cover in your superannuation.

Here are some benefits and drawbacks of life insurance through superannuation you might want to consider;

The decision of whether or not to fund your life insurance through superannuation is not always straightforward. You may wish to speak with an insurance consultant to get a better idea of what is best for your situation.

Is term life insurance tax deductible?