Life Insurance Cost

Compare life insurance policies with Savvy based on their cost, inclusions, exclusions and more today.

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, updated on July 19th, 2023       

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Life Insurance

We’ve partnered with Compare Club to bring you a range of life insurance policies to help you compare them side by side.

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.

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Frequently asked life insurance questions 

Can I claim the cost of my life insurance as a tax deduction?

You cannot deduct premiums paid for life, critical sickness, or total and permanent disability insurance policies outside of your superannuation fund. Tax benefits may be available for total and permanent disability (TPD) insurance or life cover if you buy them via your superannuation, while income protection premiums may be able to be claimed as tax deductions inside or outside super. Tax benefits are usually claimed for you by your superannuation fund, however. If you’re unsure about what you can and can’t claim, it’s worth speaking to an independent professional.

What can I use my life insurance payout for?

Life insurance payouts are discretionary, meaning the recipient can spend the money any way they choose. A dividend might be allocated towards debt reduction, investments or general living expenditures.

How do I apply for life insurance with Savvy?

Buying life insurance through Savvy is straightforward and involves the following steps:

  • Grab a quote: getting a life insurance estimate is the first thing to do. Tell us your age, occupation, smoking habits, the existence or absence of any current health problems and how much cover you need.
  • Compare your options: after receiving your quote, you can easily compare your options among our partner’s panel of insurers, including instant, up-to-the-minute rate estimates. Look at the coverage, see what is and isn’t covered and the rates to determine the best option among the panel.
  • Schedule a call back: if you decide to purchase a policy through us, you can set up a consult with a life insurance expert. By speaking with a professional, you can get your key coverage questions answered before you buy your policy.
  • Seal the deal: if everything seems good after you speak with your expert, you can go ahead and buy your policy. Your coverage will begin at the conclusion of your waiting period, which will be outlined in your insurer’s PDS.
How do I make a claim on my life insurance?

The claims process is different depending on the type of life insurance event you’re claiming for and the insurer you hold your policy with. For example, if a person is claiming after your death, they’ll need to complete a claim form and produce a death certificate and a copy of the deceased’s birth certificate, driver’s licence or passport.

If you’re making a claim related to sickness, disability or injury, you’ll need to produce details of the incident, proof of your salary and a description of your disability, as well as any further documentation or information required by your insurer. The time it takes to process your claim will depend on the nature and complexity of the incident, the policy you have and the insurer you’re with.

Do life insurance policies have age limits?

Yes – life insurance policies generally come with maximum entry age limits, which may range from 60 to 75. However, the age limits for coverage tend to vary depending on the policy you take out. For example, while income protection insurance may only cover you until you reach 65 years old, some insurers can offer protection up to the age of 100 (or even beyond in some cases) under a standard life cover policy.

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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.