Finder makes money from featured partners, but editorial opinions are our own.

Whole life insurance

Whole-of-life insurance is no longer available in Australia, but term life insurance, which covers you for a limited time period, is a good alternative.

Whole life insurance was popular in the '70s and '80s, but it's no longer sold in Australia. A reliable alternative that can provide a safety net for you and your family is term life insurance, which is now used instead of whole life insurance.

The only difference between the two is that whole life insurance used to include an investment portion, which Aussies could withdraw funds from when they retired. When superannuation was made compulsory, there was no longer any need for that investment portion of the policy, and term life insurance became more popular.

Get a quote for term life insurance

Term life insurance is considered more affordable than whole life insurance, and it's still possible to find a policy with no age limits. The options below also have an expiry age of at least 99 so long as you keep paying your premiums.

Name Product Maximum Cover Maximum Entry Age Terminal Illness Benefit Claims Acceptance Rate Average Claim Time Sum Insured
NobleOak Life Insurance
1.1 months
$24,483 million
Our verdict: Finder Life Insurance Award winner for the last 5 years in a row. Good value for money, simple application process and a high claims acceptance rate.

⭐ Current offer: Get one month free for a limited time - apply by 21 December 2023. Offer T&Cs on insurer website apply.
TAL Accelerated Protection Life Insurance
No set limit
Not stated
Data not available
1 months
$249,285 million
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).

⭐ Current offer: Get up to 15% off your TAL Life, Trauma or TPD insurance policy for life - if you have a Body Mass Index (BMI) between 19 and 28 at the time of your application. Offer T&Cs on insurer website apply.
Medibank Life Insurance
Data not available
Data not available
Data not available
Our verdict: Medibank offers a higher payout limit ($2.5 million) than 15 other providers. Get a 10% discount if you're already a Medibank Health Insurance member.
ahm Life Insurance
Data not available
Data not available
Data not available
Our verdict: ahm offers a simple application process. You can be approved online or over the phone. There are no medical or blood tests required.
HCF Life Protect Insurance
Data not available
Data not available
Data not available
Our verdict: Similar cover to other insurers ($1.5 million). A good discount for HCF members of 10% and an easy initial quote process.

⭐ Current offer: Eligible HCF Members receive 10% premium discount and HCF Thank You rewards.
RAC Life Insurance
1.1 months
$24,483 million
Our verdict: RAC’s maximum death cover limit of $25 million is one of the highest limits you’ll find, including $5 million in TPD insurance. You can get an online quote, but you’ll need to call RAC to get trauma cover. Benefit from added peace of mind with fully underwritten insurance.

Real Family Life Cover
2.4 months
$53,238 million
Our verdict: The application is simple; it can be done with 1 phone call and there are no medical exams. But households with larger debts may need more than a $1 million payout.

⭐ Current offer: Get back 10% of the premiums you’ve paid after 1 year.

Why compare life insurance with Finder?

  • You pay the same price as buying directly from the life 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.

How did whole life insurance work?

Before superannuation was made compulsory, most workers used whole life insurance as a means of providing funds for when they retired, by surrendering their policies so they could access the policy’s cash value. A portion of the premium paid for whole life assurance having been put aside for investment purposes and another to fund the insurance cover.

Cost difference between whole life insurance and term life insurance in Australia

Whole life insurance was considerably more expensive to low cost term insurance, due to the cash value component. However, it is important to note that while the guaranteed earnings you can get with whole life insurance is attractive, often the interest you receive from the investment portion does not pay any more than when you have savings account with a bank.

However, some might still consider whole life to be a worthy investment in Australia, this is because whole life was seen as forced savings and by having a cash value component. Policyholders had the assurance that the life insurance company would have to pay out on whole life insurance one way or another, either in event the life insured’s death or when the policy was surrendered.

What were the advantages and disadvantages of whole life insurance?

  • Peace of mind of having a lifelong protection.
  • Often used as mandatory savings.
  • Access to cash when your circumstances change.
  • Premium remains the same throughout the life of the policy, regardless of your age.
  • Guaranteed death benefit.
  • Your cash value portion will continue to grow each year with guaranteed interest earnings.
  • Possible dividend earnings, which can be used to increase your cash value, reduce premiums, or withdrawn for other purposes.
  • Possibility to save money to fund your retirement.
  • Premiums are much higher compared to term life insurance.
  • Not flexible when you need to increase or decrease your cover.
  • The cover amount does not keep up with inflation, which puts your beneficiaries at risk of underinsurance at the time of claim.
  • Poor investment choice as the interest you earn on the cash value may be lesser than other available investment alternatives.

It is important to note that although whole life insurance policies are generally regarded as “whole of life,” they do in fact expire when you turn 100 years old. This means, if you were to live to 100 or more, the policy would mature and the face value would then become payable.

What's the difference between whole life and term life insurance?

Similar to whole life insurance, term life cover provides a lump sum death benefit in the event that the policyholder passes away while the policy is still active. There are some notable differences between whole life and term life insurance. These include:

CharacteristicsWhole Life InsuranceTerm Life Insurance
CostMore expensive, due to the investment portion of the policy.More cost-effective.
Length of CoverCovers you for your entire life, provided that premiums are paid when due.Remains active for the term selected by policy owner at time of application. This can usually be renewed into the future.
FlexibilityNot so much - you can’t change your cover amount when your needs change.Very flexible - you can apply to increase your cover when necessary without having to provide further medical evidence.
InflationDeath benefit stays the same, regardless of the inflation rate, which may result in insufficient cover in the future.Cover is automatically increased each year to keep up with inflation.
Features and BenefitsThe cash value component allows you to borrow funds when required, used as a collateral against a loan, or to pay for your premiums.Greater range of features and benefits that you can tailor to suit your needs. You can also link term life with other types of life insurance to cover temporary and permanent disability.

Financial advisers will often recommend term life insurance for insurance purposes and suggest that you find other ways to invest the remainder of your money, but this depends on how much money you have available for investment purposes and whether you have the capital available to take advantage of the most profitable investments.

How long can term life insurance be taken out for?

You have the power to select a period of cover most suitable for your situation. Applicants usually select terms of 5, 10, 15, 20 and 30 years. Another benefit of term life insurance is that you will continue to be insured in the future as long as you meet the premium payments when due, regardless of any changes to your health, occupation or pastimes.

How are premiums paid for?

You are also in control of choosing the premium structure that best suits your financial situation:

  • Stepped
  • Level
  • Hybrid

Enter your details and one of our partner brokers will call you. They will discuss your quote, options and available products. Not available to those over 75 years old.

Do you smoke?

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

Lender Logos

How does it work?

Your premiums will stay the same regardless of your age with level premiums, however, it will convert to stepped premiums at the cut-off age, usually between the age of 60 to 65. With stepped premiums, your rates will increase overtime with age and become considerably more expensive in the later stages of life. On the other hand, Hybrid premiums offer the benefits of both level and stepped premiums, so your premiums will increase as you age at the first stage of your cover, and fixed to a specific rate for the rest of the policy life.

Will whole life insurance ever return to the Australian insurance industry?

An important question was raised in a recent MDRT gathering for financial professionals in 2013 on whether the time has come for whole life product to make its comeback to the Australian market.

Jeffrey Ranz, a US based adviser, shared his opinion that the major distinction between term life and whole life policies comes down to ‘when’ and ‘if.’ The question with term life insurance is ‘if’ the policy will provide a payout, while whole life is a matter of ‘when’ the policy will be paid.

Ranz concluded that whole life insurance is the only cover that can guarantee this 100% of the time, but not so much with term life insurance.

The Australian market may one day see the revival of whole life insurance when the industry sees the merits of bundled life insurance and savings/investment plan.

Why you can trust Finder's life insurance experts


We're free

You pay the same as buying directly from the life insurer. Better still, we regularly run exclusive deals that you won't find on any other site – plus, our tables make it easy to compare policies.
expert advice

We're experts

Our team of life insurance experts have researched and rated dozens of policies as part of our Finder Awards and published 250+ guides to make it easier for you to compare.

We're independent

Unlike other comparison sites, we're not owned by an insurer. That means our opinions are our own and we work with lots of life insurance brands, making it easier for you to find a good deal.

We're here to help

Since 2016, we've helped 270,000+ people find life insurance by explaining your cover options, simply and clearly. We'll never ask for your number or email. We're here to help you make a decision.

Frequently asked questions

More guides on Finder

Go to site