Life Insurance Cost
Compare life insurance policies with Savvy based on their cost, inclusions, exclusions and more today.
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Life insurance can give you and your loved ones greater peace of mind that you can be covered financially for a range of unexpected circumstances, depending on the policy you buy. However, there are many factors which can determine how much your policy will end up costing, so it’s important to understand what these are and how they’ll affect you.
By comparing with Savvy, you’ll get to consider offers from a panel of some of Australia’s leading insurers and get real-time premium estimations. You can weigh up various benefit limits, what’s included and what isn’t and the type of insurance that works best for you. Grab a quote and start comparing with us today.
How much does life insurance cost?
There’s no golden rule when it comes to the cost of life insurance, as the price of your premium is determined by your own unique set of circumstances. As such, there’s no one average cost of life insurance premiums per month which can be applied, as the price one person pays for their cover is more than likely going to be different to what another pays.
For example, a woman in her 60s who smokes regularly is likely to pay substantially more per month for life insurance than someone in her 40s or 50s who doesn’t smoke, which would be higher due to her age and smoking status.
However, it’s important to remember that cost isn’t the only consideration. If you decide to get life insurance, other factors to think about include the amount of coverage you need, whether you want to combine your life coverage with total and permanent disability (TPD), trauma or income protection cover and the limitations of your policy (such as key exclusions).
What factors impact the cost of life insurance?
As mentioned, there’s no one average cost of life insurance per month. Companies take multiple variables into account when assessing how much you’ll need to pay for your cover. Some of these include:
- Your age: a person’s premiums are heavily weighted towards their age due to the increased risk of an insurer having to pay out a policy as we get older. Therefore, insurance premiums tend to be more affordable for individuals under the age of 50 than those for policyholders over 50 or 60.
- Your coverage: wanting a greater life insurance payout will increase your premiums. For instance, a policy with a $100,000 benefit will be cheaper than one with a $2 million payout. If you want to avoid overspending on insurance that your family won’t need, it’s important to first determine what protections they really require.
- Your health and lifestyle: if you’re a smoker or overweight, you can expect to pay more for insurance, whereas those who don’t smoke and are fitter and healthier pay lower premiums. When determining your premium, some insurance companies may consider your weight, blood pressure and cholesterol levels.
- Your job: the riskier your occupation, the more you can expect to pay for your life insurance. For example, if you work on telephone lines, you can expect to pay a higher premium than someone who works a desk job due to the increased risk of injury or death.
- Health conditions: you may pay a greater premium due to a continuous medical issue. If you suffer from a condition your insurer believes increases the likelihood of making a claim, you’ll likely pay more for your policy.
- Family history: if you have a family history of certain types of cancer or heart conditions, you may need to pay a higher premium if you’re wanting to buy life insurance. However, this will depend on your insurer and their terms and conditions.
- Premium options: stepped rates enable insurance premiums to begin at a low rate and rise as the policyholder ages, whereas level premiums only rise with inflation and aren’t linked to your age. Also, since whole of life policies were phased out in the 1990s in Australia, you’ll only get the option of a term life insurance policy.
Other than the cost, how should I compare life insurance policies?
How much your life insurance costs isn’t the only thing you need to focus on when purchasing a policy. You’ll also need to double-check the policy you’re eyeing is the right one for you and your family, which you can do right here with Savvy. When you’re comparing with us, you can weigh up the following factors:
- Level of cover: the main goal of life insurance is to provide financial security for your dependents if you die or get seriously sick. If you want to make sure your loved ones are taken care of financially after your death, you need to decide on a suitable amount to leave them. For instance, while there aren’t any limits on potential life cover payouts, you’re generally limited to $3 million to $5 million under TPD insurance.
- Type of life insurance: to choose the best policy, it’s important to investigate the many types of life insurance available and the different areas which they can offer cover in. Whether you’re looking for life cover, income protection, TPD or trauma insurance (or a combination of more than one), you should always take the time to work out which is most suitable for your needs.
- What’s included: when you’re comparing life insurance policies, you’ll be looking for the one that provides you with the most suitable coverage at the best cost. Inclusions to look for include funeral cost advancement, worldwide coverage and inflation-proofing, though specifics may vary by provider.
- What isn’t included: in most cases, insurers will have a list of general exclusions in their policies and a PDS which shows you what is and isn’t included. This often includes suicide (though some may offer cover for this outside the first 13 months of your policy), acts of criminality or travel to an active warzone. It’s best to compare these, as they may differ by provider.
- Waiting periods: it generally takes some time after purchasing a life insurance policy for your coverage to kick in. Depending on the type of insurance you buy, there might be a waiting period of between two weeks and two years before it does. This means it’s important to shop around to locate a plan with a suitable waiting time.
Types of life insurance
Why compare life insurance through Savvy?
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Compare policies online
By filling out a simple online quote form, you can compare offers based on their coverage, cost and more before you buy.
How to reduce the cost of your life insurance
Compare with Savvy
The simplest and quickest approach to saving money on your life insurance is to compare your options. Shopping around for plans with Savvy is a sensible method to minimise your life insurance premiums if you’re seeking out a deal which covers your needs but doesn’t break the bank. Comparing with Savvy allows you to compare life insurance plans from a panel of leading providers in one place, helping simplify the process and take the guesswork out of choosing your policy.
Make positive lifestyle changes
Quitting smoking, drinking less and exercising more can all reduce the premium you pay for life insurance. In some cases, quitting smoking alone for 12 months may reduce your premiums by about half. Insurers factor in the risks associated with each policyholder when determining premiums for life insurance, so your overall health and medical history can have a major impact on your rates.
Pay an annual premium
Some insurance companies may provide discounts if you pay for the full year at once instead of making payments per month. You may find that contributing a single yearly payment may end up saving you more on average than a monthly life insurance payment.
Buy when you're young
Young people often won’t think of purchasing life insurance because it can be perceived as being either too expensive or unnecessary. However, since they pose a lesser risk to insurers, younger buyers are more likely to receive cheaper premiums. Purchasing life insurance at a younger age may help you save money throughout your policy’s coverage period compared to an older first-time policyholder.
Consider your future needs
Take a good look at your financial situation before you start comparing policies. This will help guide your decision on how much life insurance you may need and help you avoid being overinsured. Think about the bills your loved ones would have to pay in the event of your death or permanent disablement. Investing an excessive amount into your life insurance might be financially onerous, especially if your family can get by with a smaller sum insured.
Combine your policies
Some life insurance companies may provide bonuses and price discounts if you purchase numerous plans from them. One option is to take up a combined life insurance policy with your spouse, while another is to bundle TPD or income protection with your ordinary life insurance policy. Consider whether bundling policies or combining them with a partner may be suitable for you.
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Disclaimer:
Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.
Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.
For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.
