How to Find Cheap Life Insurance in Australia
Finding cheap life insurance premiums for policies that provide good value and meet all of your personal requirements often seems like a challenge. We give you 10 easy things which you can do today to find the right protection for you and your loved ones.
Published November 19, 2021
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Buying life cover for the first time is difficult, but it’s even more difficult if you’re looking for the most affordable option as you may not be aware of the factors that’ll impact how much you pay. There are several tips for finding the cheapest cover, but it’s important to remember that each individual generally has their own requirements which may impact the price you pay for insurance.
10 steps to finding the cheapest life insurance in Australia
I have listed my 10 personal steps prioritised based on the savings potential however the impact each step can have on any one person can be different therefore always best to consider all 10 of these steps when searching for more affordable rates.
1. Apply for Cover as Young as Possible
Life Insurance Companies base their premiums on mobility & mortality rates (ie: your age effect your likeliness of illness or premature death), therefore generally the younger you are the cheaper your premiums will be, and the healthy you are therefore consider cover as soon as possible.
2. Shop Around
There are 3 main distribution channels in Australia get multiple comparison quotes from each channel premiums can vary from 10-150% more expensive when comparing like for like:
- Retail: Acquired through a broker and/or comparison website
- Group: Procured through your Superfund or employer
- Direct: Obtained either through your bank, online or from a big brand
3. Consider Level Premiums
This premium type can provide far more affordable premiums in the long term. However, if you only need cover for the short term then stepped premiums might be a better option for you.
4. Quit Smoking
If you are a smoker, your premium rates will be higher. When you quit smoking, your premium rates could be reduced by as much as 30 – 50%.
5. Healthy Lifestyle Discounts
Recently introduced into the life insurance industry is the healthy lifestyle discounts and benefits on offer which can have a major effect in reducing your premiums by up to 20%
- AIA Vitality
- MLC On track
- Clearview Health Maintenance Rewards
- Asteron Healthy Life Discount Options
- Tal Health Sense
6. Yearly Premiums
You can save you 5-8% on your premiums as most companies charge you more for paying your premiums on a monthly or fortnightly basis.
7. 15% Tax Credit
A Tax credit of 15% is generally available to your super fund if you fund a Retail policy out of your existing super fund which ensures you are not missing out on the 15% tax back you would have received if you had funded it directly from a SMSF or a group policy of the super fund.
8. Multi Policy Discounts
You can save on premiums when purchasing multiple policies from the same company. For example, if both you and your partner take out a policy from the same insurer you may receive a discount on your premiums of up to 10%.
9. Combined or Linked Benefits
You’ll generally receive additional discounts when purchasing multiple types of cover on the same policy from the same company. These policies are cheaper than stand alone polices.
10. Avoid Policy Fees
Consider insurers / polices that have removed policy fees from their premium calculation. For example, MLC Insurance and Clearview Life Solutions.
Who has the cheapest term life insurance?
In our research we tried to include data from all three distribution options available to customers when selecting life insurance:
- Direct insurance: Obtained either through your bank, online or from a big brand
- Retail insurance: Acquired through a broker and/or comparison website
- Group Polices: Procured through your Superfund or employer
It is important to note that our research was conducted on rates for term life insurance only and that you shouldn’t make a decision purely based on premiums. Always consider the entire policy before deciding which one is best for you and your family. Carefully review each policy’s benefits, exclusions and terms and conditions in their product disclosure statement.
Upon reviewing the data, we discovered the 10 cheapest life insurance quotes for 35-year-old males and females to be retail and group policies.
Cheapest Life Insurance for Males
| Ranking | Policy | Monthly Premium |
|---|---|---|
| 1 | Clearview Life Solutions | $34.39 |
| 2 | MetLife Protect Life Cover with Healthy Lives | $35.01 |
| 3 | Zurich Wealth Protection | $35.36 |
| 4 | Zurich Wealth Protection with LiveWel | $35.36 |
| 5 | Neos Protection Life Cover Preferred | $37.75 |
| 6 | Tal Accelerated Protection | $38.03 |
| 7 | MetLife Protect Life Cover | $38.90 |
| 8 | Neos Protection Life Cover | $40.82 |
| 9 | OnePath OneCare Life Cover | $36.53 |
| 10 | AIA Priority Protection Life Cover Benefit | $42.83 |
Source: Lifeinsurancedirect.com.au Comparison Engine (November 2021; Premium estimates for $1million worth of term life insurance with stepped premiums for a 35-year-old male, non-smoking individual who lives in NSW)
Cheapest Life Insurance for Females
| Ranking | Policy | Monthly Premium |
|---|---|---|
| 1 | MetLife Protect Life Cover with Healthy Lives | $26.36 |
| 2 | Tal Accelerated Protection with Health Sense | $27.44 |
| 3 | Neos Life Cover Preferred | $28.99 |
| 4 | MetLife Protect Life Cover | $29.28 |
| 5 | Zurich Wealth Protection | $29.34 |
| 6 | Zurich Wealth Protection with LiveWell | $29.34 |
| 7 | Tal Accelerated Protection | $30.12 |
| 8 | Neos Protection Life Cover | $31.34 |
| 9 | AIA Priority Protection Life Cover Benefit | $33.92 |
| 10 | MLC Life Cover Insurance | $33.92 |
Source: Lifeinsurancedirect.com.au Comparison Engine (November 2021; Premium estimates for $1million worth of term life insurance with stepped premiums for a 35-year-old male, non-smoking individual who lives in NSW)
How your sum insured affects your life insurance rates
Here’s a tip few people know about: The first $100,000 of life cover is the most expensive to purchase. Generally, the greater your sum insured, the less you’ll pay per $1,000 worth of cover.For example, a 35-year-old, non-smoking, female, purchasing a $1,500,000 life insurance policy will only pay $0.27 extra per month for every $1000 cover added. In comparison, if that same female purchased a smaller policy of only.
Remember it’s generally best not to base your decision solely on the cost of premiums. While you are searching for the most affordable policy, your beneficiaries should remain your priority. Ensure you do not compromise on the policy terms and conditions just because the premiums are cheaper. Be sure to read the Product Disclosure Statement and ensure it meets your needs before selecting a policy.
Frequently Asked Questions and Answers
How do I find cheap life insurance?
To find an affordable term life cover policy that has all of the features and benefits you really need, it’s generally a good idea to compare policies from several insurers. To compare policies you can fill in the quote form above. Alternatively, you could give us a call at 1300 135 205 and speak with a specialist to find a policy that matches your requirements.Will my life insurance premium stay the same?
This typically depends on whether your premiums have a stepped or level premium structure. Level premiums are more expensive up front, but generally won’t increase over time. If you opt for a stepped premium policy, you may pay less in the beginning but your premiums will become more expensive. Make use of Life Insurance Direct’s premium projections facility to learn how your premium may change over time.Can I cancel my life cover if I can’t afford it?
Yes, generally you will be able to cancel your cover if you are no longer able to afford the premiums. However, there are typically several options available to you which might allow you to maintain your cover and continue protecting your family. Some options may include speaking with a specialist to assess your requirements, comparing quotes from different insurers or freezing your premiums.
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1st question:
Do you think I can save much by switching from my current insurer (whom I’ve been with for more than 20 years)?
My details:
Male
Non-smoker
57 years old
Cover till age of 99
Amount of cover – $630k – both Death + TPD
Monthly Premium – $550
Using the online comparison system, I found a policy for a premium of $373 pm – 32% cheaper than I’m currently paying
– but I’m not comparing apples with apples – this cover is only until age of 70.
2nd question:
I was surprised to findout my existing cover lasts until I am 99 – which means it will definitely be paid out one day – which means I don’t understand how the insurer can make any money on a policy like this? Am I missing something?
Hi Mark.
As you stated above, you could possibly save 32% on a similar policy, but it expires at age 70. Whether this is a better option for you depends on your requirements, for example, many people don’t feel like they need as much life insurance when over the age of 70 (especially if their mortgage is paid and kids have left home) and will thus prefer a policy that only covers them until that age. Remember, if you have a stepped premium style policy your premiums will increase each year as you age, which might not be affordable when on a budget. Please give us a call on 1300 135 205 and an insurance specialist can assist you with comparing apples-to-apples policies.