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Types of life insurance in Australia

There are 6 types of life insurance in Australia and they all cover different life situations.

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Life insurance is there for you in life emergencies. Because there's more than one way in which your life can change unexpectedly, insurers offer specific policies for various different scenarios and needs. We've broken down the main ones down for you below.

Compare the 6 main types of life insurance in Australia

TypePayment type:Main purposeGeneral entry age requirements
Life cover (Death cover)Lump sumPays out to loved ones in the event of your death18 - 79
Income ProtectionOngoing monthly benefit of up to 85% of regular incomeKeep up with your expenses if you are forced to take some time out of work due to accident, illness or major trauma18 - 64
Trauma coverLump sumPays out if you're diagnosed with specific illness e.g. stroke so that you can focus on your recovery18 - 64
TPD coverLump sumPayment to clear debts, cover medical costs if you become permanently disabled18 - 64
Funeral InsuranceLump sumCover the cost of your funeral (up to $30,000)18 - 79
Accidental injury / deathLump sum or income protectionProvides cover in the event of accidental injury /death (no sickness cover)18 - 64

Life insurance from direct brands

1 - 8 of 8
Name Product Maximum Cover Maximum Entry Age Terminal Illness Benefit Average Claims Acceptance Rate Average Claim Time Sum Insured
NobleOak Life Insurance
$15,000,000
69
$15,000,000
98.1%
1.1 months
$20,230 million
Get 2 months free when you apply for one or more life insurance types with NobleOak's Premium Life Direct policy before 30 June 2022. T&Cs apply.
TAL Life Insurance
$2,000,000
74
$2,000,000
87.10%
2.9 months
$36,630 million
Finder verifies that TAL has more Australian lives insured than any other provider - for 3 years in a row. Plus, get up to 15% off with TAL’s Health Sense program.
Real Family Life Cover
$1,000,000
64
$1,000,000
90.20%
1.8 months
$53,462 million
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™.
Medibank Life Insurance
$2,500,000
70
$2,500,000
87.30%
3.8 months
$31,745 million
With Medibank Life Insurance, you’ll also get access to the 24/7 Medibank Nurse phone service. Medibank health members will save 10% on premiums every year. T&Cs apply.
Zurich Ezicover Life Insurance
$1,500,000
69
$1,500,000
Data not available
Data not available
$12,444 million
Get your first month free and a 10% discount by taking out a second life insurance policy (discount applies to the second policy). T&C’s apply.
ahm Life Insurance
$1,500,000
65
$1,500,000
87.20%
3.8 months
$31,745 million
Get ahm life insurance by 30 June and keep your cover for 6 months to receive $100 cashback. T&Cs apply^.
RAC Life Insurance (Only available in Western Australia)
$25,000,000
69
$25,000,000
98.10%
1.1 months
$20,230 million
When you purchase RAC Life Insurance, WA residents receive complimentary RAC membership which includes access to discounts on fuel, savings on shopping, entertainment and more. T&Cs at rac.com.au.
RACQ Life Insurance
$1,000,000
65
$1,000,000
97%
Data not available
Data not available
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What type of life insurance do you need?

Take our short quiz to find out what type of life insurance may be best for you.

The following calculation is an estimate based on your answers. There are limitations. You should always speak to an adviser to get a clearer understanding of your needs and the right mix of insurance for you.

Life insurance

Life insurance pays your loved ones (the person or persons you select as beneficiaries) a lump sum payment when you die or are diagnosed with a terminal illness. You can choose the amount they'll receive – the maximum sum insured limit is generally around $1 and $15 million. Life insurance is sometimes also referred to as life cover or death cover.

Who needs life insurance?

Consider life insurance if these are your priorities:

House

Owning a home

If you were to die unexpectedly, a mortgage would be left behind for your partner to deal with.

Surgical Extraction

Starting a family

If you died unexpectedly, the cost of raising your children would be left for your partner to manage.

Vacation

Planning retirement

If you're not debt-free yet it's worth considering life insurance.

Get a life insurance quote

Total and permanent disablement (TPD) insurance

TPD insurance provides a lump sum payment if you suffer a serious illness or injury that leads to total and permanent disablement. In order for a claim to be paid, you will need to be unable to be likely to ever return to work again. It's often available as part of a life insurance policy.

Who needs TPD insurance?

Consider TPD if these are your priorities:

House

Owning a home

If you can't ever work again TPD can be used to take care of your mortgage.

Surgical Extraction

Starting a family

TPD can assist with the costs of raising a family e.g. education in the absence of your income.

Hospital

Safeguarding against unexpected health issues

TPD can pay for expenses where health insurance doesn't – for example, if you need home modifications.

Learn more about TPD cover

Trauma insurance

Trauma insurance is designed to provide cover when you suffer from a serious illness or health condition. When you experienced a specified trauma event, for example heart attack, cancer or stroke, trauma insurance provides a lump sum benefit. This type of cover is sometimes also referred to as critical illness insurance.

Who needs trauma insurance?

Consider trauma insurance if you want to:

Hospital

Deal with unexpected health issues

For example if you are diagnosed with cancer or a heart attack this can help with medical bills and life after treatment.

Learn more about trauma insurance

Income protection insurance

Income protection insurance pays an ongoing monthly benefit to replace your income when you are ill or injured and unable to work. Most policies will replace up to 75% of your regular income and may also offer cover for involuntary unemployment.
You also have the freedom to choose:

  • The waiting period. This is the amount of time between when you suffer your illness or injury and when you start receiving benefits.
  • The benefit period. This is the maximum length of time for which your policy will pay an ongoing benefit.

Who needs to consider income protection?

Hand holding money icon

Workers who rely on their income

If you are reliant on your income to pay the bills, including if you're self-employed or a high-income earner, then it's important to consider.

House

Homeowners or renters

Income protection can help you keep up with mortgage repayments or rent if you are out of work.

Surgical Extraction

Ongoing family living costs

You'll be able to keep up with the costs of raising children – for example, school fees, food and sports classes.

Compare income protection insurance

Personal accident insurance

Personal accident insurance, which is sometimes also referred to as accidental injury insurance, provides a lump sum payment when you are injured as a result of an accident. It covers injuries such as dislocations, fractures, severe burns and loss of sight or limbs, with different benefits payable depending on the type of injury. It's different from income protection insurance because it doesn't cover illnesses – only accidents.

Get a quote for personal accident insurance

Funeral insurance

Funeral insurance provides a lump sum payment to your loved ones or beneficiaries when you pass away. This benefit can be used to cover the cost of your funeral and meet any other immediate expenses that may arise. It’s generally very easy to apply for funeral insurance cover – there's usually no medical tests required and you are guaranteed acceptance if you're under 70 years of age. However, if you can afford life insurance, this is often a better value option.

Compare funeral insurance

FAQs about life insurance types

Enter your details and one of our partner brokers will call you. They will discuss your quote, options and available products.

Sex
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An adviser can help you find cover from trusted life insurance brands.

  • Get competitive quotes from multiple brands
  • Lower rate of declined claims (according to ASIC)
  • Save time and effort

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