People think about life insurance around these life stage changes:
New job
Married
Had a baby
Bought a house
Made a large investment
Come into a large amount of money
The most common are:
Having children. Parents-to-be often consider life cover to be a high priority when having kids enters their life.
Buying a house. Getting a mortgage is the biggest financial commitment most people make in their lives. It stands to reason that you'd consider protecting yourself ahead of your first mortgage payment.
Employment circumstances change. Going self-employed is one example of a time you'd want to consider life cover, especially if you lose other types of insurance that were tied to your former employers.
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Finder survey: What types of insurance do Australians have?
Response
I don't have any of the above insurance
60.54%
Life insurance
32.52%
Income protection insurance
18.38%
TPD insurance
14.32%
Source: Finder survey by Pure Profile of 1110 Australians, December 2023
Based on where I'm at in life, what type of cover do I need?
Everybody is different and cover requirements will change based on the events you encounter at different life stages. But still, it's worth a look at a more detailed overview of key times many decide to take out cover based on their life stage.
Different types of life insurance
Here are the main types of life and income protection cover you can get:
Life cover.
Term life insurance provides a lump sum benefit to your beneficiaries in the event of death or after the diagnosis of a terminal illness. You can get this insurance as a standalone policy, or bundled with more cover options.
Funeral insurance provides a lump sum benefit to cover funeral costs and other outstanding expenses. The maximum amount of cover that can be taken out is usually about $15,000.
Income protection insurance.
Income protection offers an ongoing benefit of up to 70% of the policyholder's regular income if they are forced to take time off work due to illness or injury. This benefit is usually paid monthly.
How much life insurance might I need?
The amount of life insurance you need depends on your personal circumstances, such as your age, and the type of cover you want. Start by coming up with an annual sum you'd need to cover your financial commitments. Some experts say the amount of cover you'd want is at least 10 times your annual salary. But it's really up to you to decide how much your family would be comfortable with based on your situation.
You could also check to see if you already hold some life cover, such as via employment benefits. See how much that would pay out to your dependents and then calculate how much extra they might need.
We picked these policies after analysing the results from Finder's life insurance awards for 2023.
NobleOak Life Insurance: NobleOak's maximum payout for death or terminal illness is $25 million. Most providers offer cover limits of between $1 and 2.5 million. With NobleOak, you can add as much as $5 million in TPD cover – the most out of all 10 providers we analysed for the 2023 Finder Awards.
TAL Accelerated Protection: TAL's life insurance scored highly on price in the most recent Finder Awards. It was the second cheapest provider across 4 age groups – it also offers a comparatively strong policy. It pays $25,000 in funeral expenses and you have the option to add children's cover. It also offers flexibility by not setting a maximum benefit limit.
RAC Life Insurance: RAC life insurance is underwritten by NobleOak. This means it offers similar cover levels, high benefit limits (RAC goes up to $25 million) and quality add-ons. Our research team found NobleOak was more competitive than RAC on cost – by $75 per month on average (factoring in smokers and non-smokers).
Compare life insurance quotes from more direct brands
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.
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.
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
The need for life insurance often reduces once people enter their retirement years and their financial obligations change. You may wish to decrease the amount of cover you have in future years, but still have some in place to:
Provide a legacy to your surviving children in the event of your death
Tie up any final expenses such as legal fees or taxes
Your age, gender and lifestyle (for example, whether or not you smoke) are some of the key factors an insurer takes into account when setting your insurance premium.
The cost of your policy isn't everything when you're comparing life insurance though. You may choose to add more features to your cover and pay a bit more for your premium.
It's important to find a policy that'll meet your specific needs and circumstances. If you prefer, speak to an insurance specialist to help you find personalised cover.
It is natural for the need for life insurance to reduce once people enter their retirement years and their financial obligations change. You may wish to decrease the amount of cover you have in future years but still have some in place to:
Provide a legacy to your surviving children in the event of your death
Cover funeral expenses
Tie up any final expenses such as legal fees or taxes
It is worth taking into consideration existing assets that may be used in the event of your death such as:
Superannuation
Savings
Property
Other assets such as car, contents
For young people, there's typically less of a need to get life insurance as there are fewer ongoing financial obligations compared to those who are older or with families of their own.
Good to know: These default cover types usually have more restrictive benefits and less generous terms in comparison to standard life insurance policies.
James Martin was the insurance editor at Finder. He has written on a range of insurance and finance topics for over 7 years. James often shares his insurance expertise as a media spokesperson and has appeared on Prime 7 News, WIN News, Insurance News, 7NEWS and The Guardian. He holds a Tier 1 General Insurance (General Advice) certification and a Tier 1 Generic Knowledge certification, both of which meet the requirements of ASIC Regulatory Guide 146 (RG146).
Having the right life insurance policy is invaluable if something happens to you unexpectedly. Find out what makes your policy worthwhile.
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