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8 Top Tips for Finding the Cheapest Life Insurance in Australia

Russell Cain Updated: 06 May 2022

As an Australian who needs life insurance for your family, you know the right cover is paramount to protecting and providing for them. But the costs of this type of insurance can be very high, especially when you aren’t sure what you should be looking for. However, there are ways to lower your premiums without compromising on value.

We understand that securing the cheapest life insurance that suits your requirements can be a challenge. We aim to make it easy for you to compare the most affordable life insurance policies available in Australia today. Learn more about life insurance costs and the features and benefits that you should be aware of.

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  • TAL
  • AIALife
  • MLC
  • OnePath
  • Zurich
  • ClearView
  • NEOS
  • Metlife

Compare cheapest life insurance Australia

Life insurance costs per month Australia often vary, which is why it’s important to compare policies. We’ve put together the table below to help you determine how much life insurance costs per month. It’s important to note that the cheapest life insurance in Australia can vary depending on how much cover you need. You may find the cheapest life insurance rates by comparing multiple quotes.

PolicyMonthly Premium
onepath
OneCare – Life Cover
$31.48
MLC
MLC insurance – Life Cover Insurance
$32.21
NEOS
Protection Preferred – Life Cover
$33.68
TAL 90
Accelerated Protection with Health Sense –
Life Insurance
$34.11
MetLife Logo 200x200 e1638447585839
Protect life cover – Healthy Lives (Standard)
$35.01
NEOS
Protection – Life Cover
$36.41
TAL 90
Accelerated Protection –
Life Insurance
$37.71
ClearView
Clear Choice – Life cover
$38.33
MetLife Logo 200x200 e1638447585839
Protect life cover (Standard)
$38.90
Zurich
Wealth Protection – Death cover
$39.01

Source: Life Insurance Direct Comparison Engine (May 2022); Premium estimates based on $1 million worth of life insurance for a 35-year non-smoking male, living in NSW with stepped premiums).

What impacts the affordability of my life insurance rates?

It’s important that you don’t confuse affordability with value. A cheap life insurance policy won’t necessarily offer you what you require regarding coverage and could end up costing you more when your claim payout is not sufficient.

The top 8 factors that affect your life insurance premiums

Your level of cover

A higher cover amount usually equals a more expensive premium. However, generally, if you purchase a significant amount of cover you’ll pay less per $1,000 of the total amount. 
It’s important to choose a level of cover that is appropriate to your circumstances and budget. You might want to first speak with your broker to help you determine the right amount of life insurance you need based on your current income, family structure, and other financial commitments. 

How much life insurance do I need?

First, calculate your financial obligations: Multiply your annual salary by the number of years you want to replace your income for, taking into account your debts, mortgage balance, and potential future needs (children’s education).
Second, determine your liquid assets: Savings, plus financial investments, plus your existing life insurance.
After that, subtract your liquid assets from your financial obligations to get an estimate of the amount of life insurance you need. 

Premium type

Your insurer will generally provide you with a choice between stepped, level, and hybrid premiums. 

Your age

The younger you are, the cheaper your premiums will usually be because you’ll generally be healthier and more active and thus a lower risk of possibly claiming in future. That’s why you’re encouraged to take out cover as soon as possible and not leave it until you’re much older and incur higher premiums as a result.

If you’re young, single and without dependents, a good place to start might be in purchasing income protection and critical illness cover, so you can cover your day to day expenses should you become ill or injured for a specified period of time.


 


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Family history

Certain diseases are considered to have a hereditary component. For instance, if you have a history of breast cancer in your family, it will usually be taken into consideration when calculating your overall risk.

If you have such a family medical history, the insurer might add an exclusion or loading to your policy depending on the insurer and their underwriting guidelines. The insurer may also request that you go for a medical exam. 

Lifestyle (high-risk activities)

Individuals participating in high-risk activities, like rock climbing or skydiving, might be rated as a higher risk. Thus you could pay a higher premium or have an exclusion on your policy, depending on the insurer. The same applies to your occupation, all things being equal, a person working a desk job might not pay as much as a person working in a mine. 

It’s important to check with your insurer and fully disclose your hobbies. What one insurer considers high risk, another may not. 

Your location

The state you live in may affect your life insurance premiums. If your area is statistically proven to be dangerous and reflects a higher mortality rate, then you are more likely to incur higher premiums. 

Built-in benefits vs paid options

Generally, a life insurance company which has included a variety of built-in benefits with their life cover might charge higher premiums because they are seen as offering more value. 

It might be more affordable to find a basic life insurance policy without all the bells and whistles and only pay for the additional features and benefits you want.

How much life insurance do I need?

  • First, calculate your financial obligations: Multiply your annual salary by the number of years you want to replace your income for, taking into account your debts, mortgage balance, and potential future needs (children’s education).
  • Second, determine your liquid assets: Savings, plus financial investments, plus your existing life insurance.
  • After that, subtract your liquid assets from your financial obligations to get an estimate of the amount of life insurance you need. 
life insurance

5 things to consider before choosing the best cheap life insurance company

Are you considering life insurance as a possible option to protect your family after your passing? Have you been trying to find cheap life insurance but can’t seem to really find an affordable rate? Well, don’t give up! There are many great tips and tricks on how to save money on life insurance.

11 Ways you can keep your premiums affordable

cheapest life insurance

Cheap life insurance isn’t always better

It’s important that you don’t confuse affordability with value. A cheap life insurance policy won’t necessarily offer you what you require regarding coverage and could end up costing you more when your claim payout is not sufficient. Of course, you do need to ensure that your cover is affordable, especially in the long-run, but you also need to remember that the cheapest policy may prove insufficient, leaving your family financially vulnerable.

Frequently Asked Questions and Answers

  • How to get cheap life insurance quotes online

    This best way to find affordable life insurance quotes online is to visit an insurance comparison website and request quotes from the leading life insurance companies, then comparing their benefits, features and price side-by-side. Keep in mind that you’re more likely to find the right cover at the lowest price when comparing apples with apples, i.e. similar policy types offering more or less the same level of cover.
  • Will your premiums stay the same each year?

    This typically depends on the type of premiums you opted for when you first applied for your life insurance policy. If you have a policy with stepped premiums your premiums will typically increase yearly. However, if you have a policy with level premiums, they’ll generally stay the same. If you’re unsure about which type of premium structure you have, it’s usually a good idea to refer to your Policy Disclosure Statement (PDS).
  • Should you cancel your life insurance if you can no longer afford it?

    No, typically there are several other options you could try before cancelling a policy you can no longer afford. If you are no longer able to afford your policy, you could speak with your insurer about freezing your premiums. Alternatively, you could compare quotes to find a new policy that suits your requirements as well as your budget.

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