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 August 25, 2023

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Whether you’re a first-time buyer or seeking to enhance the value of an existing policy, there are several helpful tips to assist you in finding coverage that fits your budget. However, finding the most affordable option can be challenging, particularly if you’re unfamiliar with the factors that influence the cost of life insurance. It’s critical to keep in mind that each individual has unique requirements that may affect the insurance premium.

10 steps to finding the cheapest life insurance in Australia

These tips are prioritized based on their potential to help you save money on your premiums. Keep in mind that the impact of each tip may differ depending on your individual circumstances, so it’s important to consider all 10 strategies when searching for an affordable policy. From applying for coverage at a young age to avoiding policy fees, these tips cover a range of proven strategies that can help you find the most cost-effective life insurance policy to meet your requirements.

1. Apply for Cover as Young as Possible

Life insurance premiums are based on various factors, including your age and health and companies will often base their premiums on mobility & mortality rates (ie: your age effect your likeliness of illness or premature death). This means that the younger you are when you apply for coverage, the cheaper your premiums are likely to be.

In fact, when you’re young, you’re likely at the healthiest stage of your life, and as you age, your health tends to decline. As a result, it’s important to consider getting life insurance coverage as soon as possible while you’re still healthy and premiums are more affordable. Keep in mind that the cost of life insurance tends to increase as you get older, so it’s best to lock in coverage while you’re still in your prime.

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:

3. Consider Level Premiums

When it comes to finding affordable life insurance, one option to consider is a policy with level premiums. With level premiums, the premium amount remains consistent over the life of the policy, making it easier to budget for the cost. However, it’s important to consider how long you want to keep the coverage for. If you only need coverage for the short term, then stepped premiums may be a more affordable option. It’s always a good idea to do a comparison of stepped versus level premiums and project the cost over the expected life of the policy to find the option that best fits your needs and budget.

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%

  1. AIA Vitality and Healthier Life Reward
  2. TAL Health Sense
  3. NEOS Preferred
  4. MLC Vivo
  5. Clearview Health Rewards
  6. MetLife Healthy Lives

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 ClearChoice.

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

RankingPolicyMonthly Premium
1MLC Life Cover (Vivo Incentive)$29.79
2MetLife Protect Life Cover with Healthy Lives$30.73
3OnePath OneCare Life Cover$31.48
4 MLC Life Cover$32.21
5 Neos Protection Life Cover Preferred$32.67
6Tal Accelerated Protection (Health Sense Discount)$34.11
7MetLife Protect Life Cover$34.14
8Clearview ClearChoice$34.48
9Neos Protection Life Cover$35.32
10Tal Accelerated Protection$37.71

Source: Comparison Engine (May 2023; 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)

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Cheapest Life Insurance for Females

RankingPolicyMonthly Premium
1MLC Life Cover$25.34
2Neos Protection Life Cover $25.45
3 MetLife Protect Life Cover$27.03
4Tal Accelerated Protection (Health Sense Discount)$27.24
5 Tal Accelerated Protection $29.89
6 Zurich Wealth Protection$32.31
7 AIA Priority Protection Life Cover$34.40
8AIA Priority Protection Life Cover (Vitality)$41.36

Source: Comparison Engine (May 2023; 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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