Cheap Life Insurance
People often struggle to find cheap life insurance premiums for policies that provide good value. There is little information on how to find the policies that are reasonably priced or steps you can take to further reduce your premium costs.
Published May 20, 2020
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Purchasing life cover for the first time is even more difficult, especially when you are searching for the most affordable option right from the start as you don’t know what effects your rates or how to structure your policy to get further premium reductions.
Therefore I have revealed my top 10 steps to finding the cheapest life insurance in Australia along with providing you with access to our exclusive Life Insurance Direct’s quote index. While the research doesn’t cover the entire market, you are able to compare 32 term life insurance policies premiums with the click of a button.
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 Females
| Ranking | Policy | Monthly Premium |
| 1 | Clearview Life Solutions | $30.93 |
| 2 | Tal Accelerated Protection with Health Sense | $32.19 |
| 3 | Neos Life Cover Preferred | $32.56 |
| 4 | Tal Accelerated Protection | $34.23 |
| 5 | BT Protection Plan | $34.42 |
| 6 | Neos Life Cover | $35.20 |
| 7 | AIA Life Cover Benefit | $35.24 |
| 8 | Zurich Wealth Protection | $36.53 |
| 9 | Zurich Wealth Protection with LiveWell | $36.53 |
| 10 | MLC Life Cover Insurance | $36.56 |
The above monthly premium rates were calculated on a 37 years old, non-smoking female, based in NSW, looking for $1million worth of term life insurance.
Source: Life Insurance Direct App (May 2020)
Cheapest Life Insurance for Males
| Ranking | Policy | Monthly Premium |
| 1 | BT Protection Plan with My Wellbeing | $31.79 |
| 2 | Tal Accelerated Protection with Health Sense | $40.00 |
| 3 | Neos Life Cover Preferred | $42.44 |
| 4 | Tal Accelerated Protection | $42.68 |
| 5 | Zurich Wealth Protection | $43.20 |
| 6 | Zurich Wealth Protection with LiveWell | $43.20 |
| 7 | BT Protection Plan | $43.93 |
| 8 | Clearview Life Solutions | $44.01 |
| 9 | AIA Priority Protection | $45.77 |
| 10 | Neos Life Cover | $45.88 |
The above monthly premiums were calculated on a 37-year-old non-smoking male, based in NSW, looking for $1 million worth of term life insurance.
Source: Life Insurance Direct App (May 2020)
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.
| Sum Insured | 35 | 40 | 45 | 50 | 55 | 60 |
| $300,000 | $0.35 | $0.44 | $0.64 | $1.21 | $2.22 | $4.33 |
| $500,000 | $0.31 | $0.39 | $0.58 | $1.07 | $1.97 | $3.84 |
| $1,000,000 | $0.27 | $0.34 | $0.50 | $0.94 | $1.73 | $3.36 |
| 1,500,000 | $0.27 | $0.34 | $0.50 | $0.94 | $1.72 | $3.36 |
Remember do not 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.
If you need further assistance, or if you have found cheaper premiums somewhere else in Australia please let us know below, and we will look to see if we can include them in next years research.
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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.