cost-life-insurance

What is the average cost of a life insurance policy in Australia?

You could spend as little as $5.70 per week.

We looked at three different age groups (30, 40 and 50) for people looking for cover amounts of $250,000 and $500,000 of life cover. Here's what we found:

How much does life insurance cost?

  • Around $5.70 per week for a 40 year old. This is based on $500,000 of cover for a male.
  • It's cheaper for females. Using the same details, a 40 year old female costs $4 per week vs $5.70 for a male (500,000 in cover)
  • Prices will change with personal circumstances. The cost depends on a variety of different factors including your age, smoking status and how much cover you obtain.

The table below shows the weekly cost of life insurance for 30-year-old male and female applicants.

Cover amount Male Female
30-year-old Cost per week Cost per week
$250,000 $2.93 $1.98
$500,000 $5.72 $4.00
40-year-old
$250,000 $3.39 $2.76
$500,000 $7.14 $5.45
50-year -old
$250,000 $9.64 $7.04
$500,000 $19.93 $14.56


Prices shown in table are an average taken from the finder.com.au quote engine and are for non-smoking office worker. These prices should only be taken as a rough guide. Rates last checked on September 2018.

How does the cost of life insurance compare to some of your regular expenses?

Updated May 2019. We took the average monthly cost of a $500,000 policy for a 40-year-old and compared it with some regular living expenses.

Based on the cost of living in Sydney. Data sourced from Expatistan.com. Expatistan indexes and compares the cost of living around the world. The costs are based on over 3,000 prices entered by over 600 different people.
Find out much the cost of life insurance is relatively to the cost of living

What affects the cost of life insurance?

There are several factors which insurers consider when determining how much you will pay for life insurance. To illustrate this, take a look below:

Let's imagine two friends Jeremy and Jan who are the same age.

Sex and Age

Here's how much life insurance costs between them at 35, 45 and 55.

Male vs Female at 35

Picture not described: man-1.png Image: Getty

Jeremy

Picture not described: woman.png Image: Getty

Jan

$34.00 per month$26.76 per month

Male vs Female at 45

Picture not described: man-1.png Image: Getty

Jeremy

Picture not described: woman.png Image: Getty

Jan

$52.86 per month$45.91 per month

Male vs Female at 55

Picture not described: man-1.png Image: Getty

Jeremy

Picture not described: woman.png Image: Getty

Jan

$184.08 p.m$126.66p.m

Cover amount

The amount of cover you take out will increase your cost:

Picture not described: cover-least.jpg Image: Getty

300,000 in cover.

$22.95 per month

Picture not described: cover-medium.jpg Image: Getty

800,000 in cover.

$48.06 per month

Picture not described: cover-most.jpg Image: Getty

$1,000,000 in cover.

$56.63 per month

Both quotes are for a 35 year old male who is non-smoking.

Smoking status

When you smoke, the cost of your insurance increases significantly:

Picture not described: non-smoker.png Image: Getty

Non-smoker

Picture not described: smoker.png Image: Getty

Smoker

$34.00 $64.56

Both quotes are for a 35 year old male taking out $500,000 in cover.

Note: Some insurers will also take into account your health and lifestyle. This is called underwriting and usually happens during the application process.

Full list of factors:

My premium has gone up since I applied when I was younger...why is this the case?

If your premiums are rising and your level of cover has stayed the same, you're most likely on a policy with stepped premiums. This means each year the insurer will recalculate your premiums based on your current level of risk, which let's face it, increases as you get older.

Keeping your premiums affordable

Luckily, your cost is not all that changes as you age. There's also a good chance that you've paid down the mortgage and your kids are becoming more independent. If that's the case, you can consider decreasing your level of cover. That will bring your costs down and counteract the age-related price increases you've been experiencing.

Simply review your financial situation and get in touch with your insurer.

Does your age matter when you apply? Here's how it affects cost

Cost is affected by your age both at the time you buy a policy (the older you are the higher your quoted) and over time e.g. as you get older the amount you pay monthly may increase. We analysed the monthly cost at the time of purchase for a life insurance policy with $500,000 in death cover and $200,000 in total and permanent disability insurance below.

Key takeaways

1) Buy life insurance at a younger age to save money.

2) Try lock in a level premium to keep how much you pay the same as you age.

  • For males,
    • The difference between buying at 40 vs 30 years old is $7.84 (on average)
    • A whopping $74.42 between 50 and 40 years old.
  • For females:
    • The difference between buying at 40 vs 30 years old is $8.37 (on average)
    • $59.87 between 50 and 40 years old.

Here's the cost breakdown

Policy30 years old
  • Difference
40 years old
  • Difference
50 years old
AVERAGE$34.20
  • $7.84
$42.04
  • $74.42
$116.46
Clearview LifeSolutions$32.56
  • $7.75
$40.31
  • $80.99
$121.30
TAL Accelerated Protection$29.77
  • $9.28
$39.05
  • $81.22
$120.27
CommInsure Protection$35.07
  • $9.61
$44.68
  • $75.16
$119.84
Asteron Life Complete$35.19
  • $4.41
$39.60
  • $69.36
$108.96
MLC Insurance$31.00
  • $8.96
$39.96
  • $67.12
$107.08
OnePath OneCare$35.79
  • $7.99
$43.78
  • $73.63
$117.41
Zurich Wealth Protection$36.68
  • $8.96
$45.64
  • $70.52
$116.16
AIA Priority Protection$30.54
  • $4.66
$35.20
  • $70.13
$105.33
AMP Elevate$35.67
  • $5.24
$40.91
  • $71.01
$111.92
BT Protection Plans$39.74
  • $11.55
$51.29
  • $85.06
$136.35
Policy30 years old
  • Difference
40 years old
  • Difference
50 years old
AVERAGE$26.87
  • $8.37
$35.23
  • $59.87
$95.10
Clearview LifeSolutions$23.40
  • $10.68
$34.08
  • $65.68
$99.76
TAL Accelerated Protection$23.01
  • $9.29
$32.30
  • $66.88
$99.18
CommInsure Protection$28.82
  • $8.56
$37.38
  • $61.85
$99.23
Asteron Life Complete$28.62
  • $5.77
$34.39
  • $55.47
$89.86
MLC Insurance$24.18
  • $8.32
$32.50
  • $53.13
$85.63
OnePath OneCare$29.08
  • $7.99
$37.07
  • $58.44
$95.51
Zurich Wealth Protection$30.36
  • $8.42
$38.78
  • $56.73
$95.51
AIA Priority Protection$20.81
  • $6.35
$27.16
  • $55.75
$82.91
AMP Elevate$28.56
  • $6.05
$34.61
  • $58.00
$92.61
BT Protection Plans$31.81
  • $12.24
$44.05
  • $66.77
$110.82

We calculated the average monthly costs based on life insurance policies in our quoting engine. The prices shown in tables are an estimate and were generated in July 2018.

What if you're a smoker?

If you are a smoker, the monthly cost you'll be quoted increases and it also increases even more as you get older.

Key takeaways

1) If you can, quit smoking and ask your insurer when you'll be eligible for non-smoking rates.

2) If you don't wish to give up smoking, then lock in a cheaper rate earlier by buying young and going for a level premium.

  • For males it increase for smokers by an average of:
    • $23.29 at 30 years old
    • $47.73 at 40 years old
    • $140.71 at 50 years old
  • For females increase for smokers by an average of:
    • $18.54 at 30 years old
    • $30.93 at 40 years old
    • $90.61 at 50 years old

Here's the cost breakdown

Males

Females

We calculated the average monthly costs based on life insurance policies in our quoting engine. The prices shown in tables are an estimate and were generated in July 2018.

Six ways to cut down your life insurance costs

  • Quit smoking. At the top of the list of possible lifestyle changes is quitting smoking. As discussed above, if you’re a smoker, you can in some cases pay double the premiums than that of a nonsmoker.
  • Cut down on drinking. Reducing the amount you drink, like quitting smoking, may allow you to find cheaper life insurance.
  • Lose some weight. If your BMI is over a certain healthy range but you are able to reduce it, some insurers will reduce your premium.
  • Get a lower level of cover. If your circumstances have changed since you first took out cover e.g. your children have become independent, then you may wish consider lowering your benefit amount.
  • Review your options. Looking around for a new provider could offer the same level of cover for a cheaper price.
  • Look for discounts. One final trick to keep more money in your wallet is to look for discounts e.g. taking out special offers that offer you free cover for a month.

Premium structures: Stepped or level

When you taking out cover, you usually have a choice of stepped or level premiums. Which structure you choose will impact how much you pay.

Stepped premiums

Stepped premiums are premiums that are recalculated by the insurer yearly as you get older and your level of risk increases. Stepped premiums are more advantageous when you are younger, because they are cheaper than level premiums, but as you get older they will become more expensive (and more difficult to pay).

Level premiums

Level premiums are averaged out over the life of the policy so that you pay the same amount every time. Level premiums are less advantageous when you are younger as they are higher than stepped premiums, but as time goes by, they will become less burdensome as your income will also increase over time.

You should seek professional advice before committing to one or the other however, as their benefits will depend on your particular circumstances.

Should I reduce life insurance cover to get a better rate?

Not so fast. Research has determined that the majority of Australians are underinsured. The danger this poses with regard to life insurance is that, should you die prematurely, your family will not be protected financially and could lose everything you have worked for.

Instead, work out how much life insurance you actually need.

How much life insurance do you need?

Working out exactly how much life insurance you need is not an easy task. In order to determine your cover needs, you’ll need to take a number of factors into account:

  • Your income.
    • If you're unable to work due to illness, injury or death how would your family cope with out your income? Make sure you life insurance policy is enough to replace your income for the foreseeable future.
  • Your dependents.
    • If you have people that are financially dependent upon you, you need to take into account their ongoing expenses and think about how they'd be affected by the loss of your income.
  • Your expenses.
    • Do you have a mortgage, car loan, credit card or other debts? Calculate the ongoing expenses your family will need to be able to pay in order to maintain their lifestyle?
  • Your assets.
    • Consider any assets you may have accumulated, for example shares, savings or investment properties. Do you want your family to live off these or would it be more prudent to provide them with enough cover so that they could keep these investments?

Life insurance calculator

How to get life the right cover

The steps involved in taking out life insurance are similar to those you should employ when choosing any kind of insurance.

  1. Determine how much cover you need and can afford, based on the amount your beneficiaries would require to maintain their lifestyle if you were gone.
  2. Determine how long you will need cover for, factoring in likely changes to your assets and lifestyle in the future.
  3. Compare policies and quotes online to determine which provides the best cover and best value for money.
  4. Talk to an insurance adviser or consultant or approach an insurer directly if you are confident about your cover needs.

Myths about life insurance and the cost

Myth 1

  • Life insurance is too expensive. This is simply not true. This article contains plenty of tips on how to keep your premium costs to a minimum, and when you consider the importance of the financial protection that life insurance provides, it quickly becomes obvious that it is a very worthwhile investment.

Myth 2

  • It’s a waste of money. Life insurance is designed to protect those you love in times of need. How would your family cope if you were injured and unable to work? How would they keep up with mortgage repayments, credit card debts and other ongoing expenses? Life insurance is like a financial safety net for your loved ones, ensuring that they will be able to cope with whatever life throws at them.

Myth 3

  • Applying for cover is a long and hard process. With the rise of direct life insurance, applying for cover is easier than ever before. Direct life insurance policies are designed to be simple and straightforward, allowing you to apply for cover and receive approval in a very short period of time. You’ll just have to answer a few questions about your health, while many companies will provide cover without even requiring you to undergo any medical tests.

Life insurance FAQs

Receive a quote with these direct brands quickly

Name Product Maximum cover Maximum Entry Age Minimum Sum Insured Guaranteed Future Insurability Expiry Age Short Description
$1,000,000
64
$100,000
No
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™.
$1,500,000
65
$100,000
Yes
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.
$1,500,000
69
$50,000
Yes
99
Receive a 10% discount on the second person when two applications are submitted at the same time, and both policies are issued.
$1,500,000
65
$100,000
Yes
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.
$1,500,000
65
$100,000
Yes
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 30 June 2019.
$1,500,000
65
$3,000
No
80
Protect what matters with a new Virgin Life Insurance policy. If eligible, you can earn 25,000 Velocity Points. Ends 1 July 2019. Min $80/month, min. 6 month policy to earn Points.
$1,000,000
65
$100,000
No
80
Receive one month's premiums off every year if you pay annually upfront. T’s and C’s apply.
$1,500,000
64
$100,000
No
No expiry age as long as premiums are paid
Cover up to $1.5 million with Guardian Life Insurance.
$2,000,000
59
$50,000
Yes
99
Get flexible life insurance up to the sum of $2,000,000.

Compare up to 4 providers

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  • Get competitive quotes from up to 10 policies
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4 Responses

  1. Default Gravatar
    AndreaApril 30, 2018

    Looking at life insurance for my 76 year-old father with a payout of $400 000 -$500 000. Non smoker. Thanks.

    • Avatarfinder Customer Care
      JeniApril 30, 2018Staff

      Hi Andrea,

      Thank you for getting in touch with finder.

      While we are not allowed to provide specific recommendations, let me give you general information to help you make a better choice.

      Kindly check out this link to get tips and quotes from insurers that offer life insurance for seniors.

      I also suggest that you obtain expert advice from an insurance adviser and help you find the right policy for your father.

      I hope this helps.

      Have a great day!

      Cheers,
      Jeni

  2. Default Gravatar
    LieuNovember 18, 2016

    I am an Australian Citizen but permanently living outside of Australia, Will I still can claim my life insurance?

    • Avatarfinder Customer Care
      RichardNovember 21, 2016Staff

      Hi Lieu,

      Thanks for getting in touch. You should contact your insurer, as claim conditions can vary between insurers. Some insurers have a maximum of 5 years for Australian expats wanting to claim.

      All the best,
      Richard

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