Written by Life insurance provides a financial safety net for your loved ones if you get seriously injured or sick, become permanently disabled or pass away. Depending on the policy you choose, your family could receive a payout ranging from $100,000 to $5 million or more to help cover immediate and ongoing expenses when you no longer can.
However, with so many options on the market, finding the right life insurance policy can be tricky. Savvy can help you compare quotes from some of Australia’s top insurers, helping you find the right plan for your needs and budget. Get a free quote through us today.
Why compare life insurance through Savvy?
You can compare life insurance policies through us for free, allowing you to come back and continue comparing at any time.
By considering life insurance policies from insurers you can trust, you can be confident in the quality of the comparison process.
By filling out a simple online quote form, you can compare offers based on their coverage, cost and more before you buy.
We’ve partnered with Compare Club to bring you a range of life insurance policies to help you compare them side by side.
How much does life insurance cost?
There’s no one-size-fits-all price when it comes to life insurance. Premiums are based on a range of personal and policy-related factors, meaning the cost can vary significantly from one person to the next. Here’s are the factors that will typically affect how much your life insurance costs:
- Your age: perhaps the biggest factor in determining the price of your premium. For instance, you can expect to pay a higher premium if you’re over the age of 50 compared to someone who's 30 years old.
- Your sex: men and women may be charged different premiums based on statistical life expectancy and risk factors.
- Your medical history: insurers will want to know about any pre-existing conditions as well as considering factors like your weight and blood pressure. Premiums may also be affected by your family medical history such as cancers and haemophilia.
- Smoking or non-smoking: being a smoker (including vaping, chewing tobacco and using nicotine replacement products) can almost double the cost of your life insurance policy because of the higher risk of disease.
- Your occupation: some occupations, such as law enforcement, firefighting and flying, are seen as more dangerous than others. Insurers will consider your employment history if you seek out life coverage.
- Hobbies and lifestyle: high-risk activities like rock climbing, scuba diving or motorbike racing can increase your premium, as can other lifestyle choices that may affect your health.
- Cover amount: the higher the benefit amount you choose, the more you’ll pay in premiums. Lower cover levels typically come with lower costs.
- Optional extras: adding ‘policy riders’ like child cover, accidental death benefits, funeral cover or rehabilitation support can offer more protection but will usually increase your premiums.
Can I get cheap life insurance?
If you're looking to save on life insurance, there are ways to cut costs without compromising on cover. The first step is to compare quotes from a range of insurers as prices can vary significantly for the same type of policy. Even if you already have life insurance, it’s a good idea to review it from time to time to make sure you’re not paying more than you need. You may also be able to take advantage of discounts and promotional offers when signing up for a new policy.
On top of this, you should check whether you already have life insurance through your super fund. Many superannuation accounts include default cover, so reviewing what's included can help you avoid doubling up on premiums unnecessarily, saving you money in the process.
However, while cheaper life insurance might seem like a good deal upfront, it’s important to make sure it provides the right level of protection. Lower premiums often mean reduced cover or more exclusions, which may not be enough to support your family if something happens to you. Striking the right balance between affordability and adequate cover is key to ensuring your loved ones are properly protected when it matters most.
Types of life insurance
In Australia there are four main types of life insurance:
Term life cover
Also known as ‘death cover’, this is insurance that pays out a lump sum of money if you are diagnosed with a terminal illness or pass away. This payout may help you cover some everyday living costs, such as mortgage repayments, credit card bills and general day-to-day expenses. It can also help you fund payments you’re expecting to make in the future, such as school fees.
A term life insurance policy offers cover for a limited period, which may be between ten and 30 years or when you reach a certain age, such as 85. Within this window, you or your beneficiaries can file a claim and, if green-lit, receive a payout if you die or are diagnosed with a terminal disease. However, outside the covered term, you won’t be covered and will need to pay for any associated expenses out of pocket.
Total and permanent disability (TPD) cover
TPD cover pays out a lump sum if you suffer a life-changing illness or injury that leaves you permanently disabled and unable to return work. Depending on your policy, this may mean being unable to work in your current job, or in any occupation that suits your education, training or experience. The money can help cover living expenses, medical expenses, house modifications and ongoing care, among other costs.
Income protection cover
If an accident or illness leaves you unable to work for an extended period, income protection cover can help by replacing part of your lost earnings. Instead of a lump sum, it pays out a regular monthly benefit, usually up to 70% of your income, depending on the policy. These payments can continue for a set period – from a few months up to five years – based on the terms and conditions set by your insurer. This type of cover can ease financial stress while you focus on recovery, helping you stay on top of living expenses, bills and loan repayments.
Trauma cover
Trauma insurance is designed to provide financial support if you're diagnosed with a serious illness or suffer a major injury. It pays out a one-off lump sum if you're diagnosed with a covered condition, which can include life-threatening or debilitating illnesses such as cancer, heart attack or stroke. This payout can help cover out-of-pocket medical costs, time off work, rehabilitation, home modifications or anything else you need to aid your recovery.
Standalone vs linked life insurance policies
When choosing life insurance, you’ll have the option to take out cover as a standalone policy or may be able to link multiple types of cover together under one package.
Standalone policies are taken out separately, meaning each type of insurance has its own cover amount and won’t impact the others if you make a claim. This gives you more flexibility to adjust or cancel individual policies, and ensures that one claim doesn’t reduce your overall coverage. However, standalone policies usually cost more overall and can be harder to manage, as you’ll need to keep track of multiple policies and payments.
Linked policies combine different types of lump-sum life insurance – in other words, term life, TPD and trauma – into a bundled package. This can reduce your total premium compared to paying for each one separately and makes managing your cover easier. The downside is that a claim on one policy (such as TPD or trauma) will typically reduce the remaining benefit on your life cover.
To help manage this, some insurers offer a ‘buy-back’ option, which allows you to restore your life cover after a claim. This can come with extra costs and conditions – for example, you may not be covered for the same illness again, such as a recurring cancer diagnosis.
Keep in mind that you will typically only be able to link lump sum policies. For example, you might choose to link your life insurance with TPD and/or trauma cover, or keep your life cover separate while linking TPD and trauma together. However, income protection cover, which pays a monthly benefit rather than a lump sum, generally must be held as a standalone policy.
How are life insurance policies different to your superannuation cover?
Many superannuation funds offer life insurance to their members, and in many cases, this cover is automatically included. But how does this compare to standalone life insurance? Here’s a breakdown of the key features:
| Insurance through super | Standalone life insurance | |
|---|---|---|
| How it's paid | Deducted from your super balance | Paid from your bank account or credit card |
| Types of cover | Usually includes term life, TPD and income protection | Choose from term life, TPD, trauma or income protection |
| Customisation | Limited to what's offered by the fund | You can tailor your cover to suit your needs |
| Eligibility | May be restricted if under 25 or balance under $6,000 | Available to most Australians (subject to approval) |
| When cover ends | TPD at 65, life at 70 or if the account is inactive for 16+ months | Cover lasts as long as you pay premiums, up to a certain age |
| Impact on super | Reduces your retirement savings | No effect on your super balance |
| Cost | Often cheaper due to group pricing | Premiums can be higher |
| Claim payouts | May take longer and be subject to super rules | Usually faster and paid directly to beneficiaries |
| Policy control | Limited – terms can change without your input | Full control over features and provider |
Which option is better depends on your personal circumstances and how much control you want over your cover. If you have specific needs or want the flexibility to tailor your policy, a standalone policy may be the better fit. On the other hand, if you're comfortable with a more general level of protection and prefer the convenience of automatic deductions, insurance through super could suit your current situation. Just keep in mind that your needs may change over time. If they do, it’s worth reassessing your options — but take care not to double up on cover unnecessarily.
How to compare and find the best life insurance policy
Choosing the right life insurance policy starts with understanding what’s on offer and what you and your loved ones need from it. There are several important features to compare when reviewing your options. Here’s what to keep an eye on:
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Inclusions
Review what each policy includes and how it protects you. Look out for features like funeral advance payments, worldwide cover, inflation protection and cooling-off periods. These added benefits can vary between insurers, so it’s worth checking what's included as standard.
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Exclusions
Every policy will have exclusions, such as death by suicide within the first 13 months, injury or death during illegal activity, substance use, or participation in risky sports or travel to war zones. Read the fine print carefully to understand what isn’t covered and whether it aligns with your lifestyle.
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Premiums
Premiums can differ significantly between providers, so it’s a good idea to get multiple quotes to ensure you're not overpaying.
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Coverage limits
While some insurance providers offer unlimited term life cover, others have much lower limits – and trauma and TPD policies generally have much lower caps. Consider how much coverage your family would realistically need and compare accordingly.
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Additional benefits
Some policies go beyond lump sum payouts by offering extras like mortgage assistance, dependent care benefits or discounts for healthy lifestyles. These can add real value, especially if your family relies heavily on your income.
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Waiting periods
Certain policies – particularly income protection and critical illness cover – come with waiting periods before you can make a claim. This could be anywhere from two weeks to several months. Compare waiting periods carefully to find a policy that matches your needs.
Once you know what you’re after, getting covered is simple. With Savvy, you can compare quotes from trusted Australian insurers in one place. Just provide a few basic details to access a range of offers, choose the policy that suits your needs and complete your purchase online. Get a quick quote.
Life insurance pros and cons
Pros
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Protection for your loved ones
The most significant benefit of life insurance is the peace of mind it gives your nearest and dearest if something happens to you and you can no longer provide for your family.
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Can clear your debts
If the unexpected happens and you become unable to earn a regular income, your life insurance can cover the regular payments on your existing debts.
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Certain payouts are tax-free
In Australia, life insurance payouts are often made tax-free to dependents. However, those who aren’t financial dependents receiving your payout could be taxed heavily.
Cons
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Can be costly
Life insurance can cost hundreds of dollars every month, putting a dent in your budget when you may not make a claim for many years.
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Potentially complex claims process
Claims on life insurance policies can be complicated and time-consuming. For instance, if there’s uncertainty about whether the event is claimable, payment will be delayed.
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You may not qualify
To qualify for life insurance, you may be required to pass a medical exam or meet certain health and lifestyle criteria. If you don’t, you could face higher premiums or be declined coverage.
Common life insurance questions answered
When you take out a life insurance policy, you get to name a beneficiary (or beneficiaries). By choosing a loved one, such as a spouse, partner or child as the intended recipient of your life insurance payout, your insurer will compensate them upon your death. You also have the option of naming your parents, business partners, friends, siblings or even a trust to manage your affairs after you’re gone.
Beneficiaries under the age of 18 in Australia aren’t legally allowed to receive funds in their name. Until then, the money would be managed by their trustee or legal guardian. No matter who you decide to name as your beneficiary, it is prudent to let them know. This is because, once the policyholder passes away, the claim must be submitted by a beneficiary, who will require the death certificate.
Your insurance provider likely has a cooling-off period, which is also sometimes called a grace period. During this period (typically between 14 and 30 days), you may choose to cancel your policy and get a full refund of premiums paid whilst it was in effect. Cancellations outside this period likely won’t come with full refunds, even if no claims have been made.
If you’ve purchased life insurance outside of your superannuation, your premiums generally aren’t tax-deductible. However, if you bought a policy through your super fund, what you pay may be tax-deductible. This will generally be claimed for you by your super fund.
Income protection insurance is an exception to this, as its premiums can typically be claimed as a tax deduction whether inside or outside super. It’s important to consult with a financial professional if you’re unsure about what you can and can’t claim.
Yes – but most life insurance policies won’t cover suicide or intentional self-injury within the first 13 months. If you’ve attempted suicide in the past, it may be treated as a pre-existing condition and affect your application. Always check the PDS for details.
Do you need support? Call Lifeline on 13 11 14 for free, confidential support or Triple Zero (000) in an emergency.
Yes – there’s no set limit on how many life insurance policies you can purchase. However, if you intend to make claims on multiple policies at the same time, you’ll need to ensure these are made within your insurers’ terms and conditions. For instance, you’ll have to disclose that you’ve received a payout for a particular event with one insurer when making a claim with another.
Yes – some life insurance companies offer specialist protection for children. Designed to lessen the financial burden on families, child life insurance can provide a lump sum payout in the event of your child’s death, terminal disease diagnosis or certain medical procedures.
Yes – if you’re living in Australia, your life insurance policy can cover you while you’re on your international holiday. However, you still need to follow Australian government directives, as you won’t be covered if you willingly travel to a country that’s under a ‘do not travel’ warning.
Yes – many Australians with pre-existing medical conditions can still qualify for life insurance. However, depending on the condition, the insurer may apply exclusions, increase your premiums or request further medical details. It’s essential to be honest about your medical history so your policy accurately reflects your situation and claims aren’t denied later.
Some insurers do offer life insurance without requiring a medical exam. Instead, you may be asked to fill out a health questionnaire or make a general declaration about your health. However, it’s crucial to be truthful when applying. Providing inaccurate or incomplete information could result in your claim being reduced or denied.
No – whole life insurance, which covers you for your entire lifetime, is no longer offered in Australia. It has been replaced by term life insurance, covering you for a set period or until a certain age.
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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.
