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Term Life Insurance in Australia

Term life insurance can step in and protect your family with a lump sum payment if you pass away or are diagnosed with an incurable illness.

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How much term life insurance could cost you Costs rundown

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What you need to know

  • Term life insurance offers the certainty of knowing how much cover you have, and for how long.
  • This type of cover gives your loved ones a payment if you die during the policy's 'term'. For example, before the age of 90.
  • It also pays out if you're diagnosed with a terminal illness and are not expected to live for more than 12 months.

Compare term life insurance options in Australia

FundMaximum CoverMaximum Entry AgeFully UnderwrittenTerminal Illness BenefitOptional ExtrasApply
Real life insurance logo

Real Term Life Cover

$100,00079No$100,000No optional

Get quote

Australian Seniors Life Insurance LogoAustralian Seniors Term Life

$100,00079No$100,000No optional

More info

HCF life insurance logoHCF Smart Term Life Cover$1,000,00054No$500,000No optional

More info

BT Life Insurance Logo

BT

Call BT at 1300 553 764 to get a personalised quote for your circumstances69YesCall BT at 1300 553 764 to get a personalised quote for your circumstancesTPD Benefit, Living Benefit, Business Cover Benefit

More info

Westpac Life Insurance logoWestpacCall Westpac at 132 135 to get a personalised quote for your circumstances69YesCall Westpac at 132 135 to get a personalised quote for your circumstancesTPD Benefit, Living Benefit, Business Cover Benefit

More info

St.George Life Insurance LogoSt.GeorgeCall St. George at 132 135 to get a personalised quote for your circumstances69YesCall St. George at 132 135 to get a personalised quote for your circumstancesTPD Benefit, Living Benefit, Business Cover Benefit

More info

What is term life insurance?

Term life insurance is a type of life insurance that provides a set amount of cover for a set amount of time (or, 'term'). It can protect your family or anyone else who's financially dependent on you if you pass away or are diagnosed with a terminal illness, before what's known as the policy's expiry age. Term life insurance can help your family pay debts and ongoing payments, such as a mortgage, if you're no longer around.

There is no cash payout or 'surrender cash value' in term life insurance. You pay a premium to have cover in place. If the term ends or you cancel your policy, you won't receive payment.

Pros and cons of term life insurance

Pros

  • It offers a lump sum payout. Your benefit's paid in one go, meaning your family has flexibilty with how they can use the money. It could be used to pay off debts such as the mortgage or credit cards. Or to maintain your family's lifestyle, such as your children's education costs.
  • You can be paid out if you get a terminal illness. If a medical practitioner expects you to die within 12 months, your policy can pay out the benefit as an advance payment. A terminal illness payment can help with medical bills, funeral costs or even as a cash gift.
  • Your policy can be renewed each year. Most policies can be renewed until you reach the age of 99, if necessary.
  • Policies can be straightforward. Exclusions are fairly limited with term life insurance. One common exclusion is a passing from suicide in the first 13 months of a policy. Otherwise, your family will usually be able to rely on a cash payout if you die during the policy term.

Cons

  • There's no benefit once the term ends. If you outlive your term insurance policy, it'll expire. Your beneficiaries won't receive any cash out or death benefit. (It's a key reason why term life insurance is competitively priced.)
  • Regular renewals and rising costs. Term life insurance is not a 'set and forget' insurance product. 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. At the end of the term, you're older than you were when you first applied, it could well make finding a new policy more expensive.
  • Your premium will directly reflect your lifestyle. 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.

How much does term life insurance cost?

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

PolicyCover amountMonthly premium*Apply

NobleOak

$500,000$23.11

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Zurich

$500,000$35.88

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Medibank

$500,000$44.34

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TAL$500,000$25.59

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AHM

$500,000$42.14

More info

Insuranceline

$500,000$49.76

More info

AAMI

$500,000$49.76

More info

Allianz

$500,000$32.65

More info

Suncorp

$500,000$49.76

More info

Bendigo$500,000$56.99

More info

Woolworths$500,000$62.85

More info

AIA$500,000$27.55

More info

AMP$500,000$26.52

More info

BT$500,000$27.68

More info

Clearview$500,000$25.02

More info

MLC$500,000$25.58

More info

Onepath$500,000$26.61

More info

*Prices are an estimate based on a 35 year old non-smoking male office worker. Quotes last checked on September 2021 and are subject to change.

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 people to take out cover or review their existing cover include buying a house, getting married and having their first child.

Building Wealth

18-2525-3535-45
  • Starting career
  • Start accumulating wealth
  • No dependents
  • No mortgage
  • Few financial commitments
  • Active lifestyle

Car graphic

  • Increase in earnings
  • Career development
  • Long term debt with mortgage
  • Possible short-term debt
  • Marriage and children

House blue graphic

  • Increase in earnings
  • Career development
  • Mortgage decreasing
  • Saving for retirement

Family blue graphic

Securing retirement

45-5555-65
  • Maximising earnings
  • Preparing for retirement
  • Less concern around financial security
  • Less long-term debt
  • Fewer financial commitment as children start to move out
  • Focus on other investments

Money blue graphic

  • Protecting wealth accumulated
  • Income decreases
  • Focus on investments
  • Finance lifestyle with savings

Vacation blue graphic

The maximum entry age may also change based on the type of premium you choose and how much cover you apply for.

Still not sure which life insurance is right for you?

Are there any add-ons I should consider for term life insurance?

There are a number of extra features you can add to your term life insurance policy to tailor it to your needs, and so you may want to consider:

  • Accidental death benefit. Will pay an additional amount above your coverage amount if your death is the result of an accident.
  • Children's term life insurance. Can pay a death benefit for each of your children covered under your policy in the event of their death. You can usually add insurance for your child for around $10,000 and $20,000, based on their age and other eligibility requirements.
  • Total permanent disablement. Will make sure your premiums are paid for you if you become totally disabled. There are often age and coverage restrictions that apply.
  • Accelerated death benefit. Will make an advance payment of part of your benefit amount if you are diagnosed with a terminal illness.

Keep in mind: By adding more features to your policy, you'll likely pay more for your premium. Read more about the cost of life insurance in our guide.

What expenses can term life insurance cover?

The payout from term life insurance can be used for any purpose. Common usages include as follows:

  • Cover mortgage or rent payments
  • Cover your child's education
  • Cover other personal debt i.e. a car loan
  • Childcare if your spouse had to return to work
  • Funeral costs and financial planning
  • Taxes
  • Everyday living expenses.

Frequently asked questions about term life insurance

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2 Responses

  1. Default Gravatar
    IanOctober 14, 2016

    Is a ‘TERM’ life policy – start 45, finish 60 for a non increasing benefit of $1,000,000 – cheaper than a similar ‘TERM’ policy start 45 to age 99, all other things being equal. (This used to be called a ‘Whole of Life’ policy I think.) If so, roughly what is the $$ difference ?

    • Avatarfinder Customer Care
      MauriceOctober 14, 2016Staff

      Hi there,

      Thanks for your question. Generally, the longer the life of the policy is, the more expensive the premium is.

      I hope this helps,

      Maurice

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