How to Find Cheap Life Insurance in Australia

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.

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:

• 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

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.

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

Source: Lifeinsurancedirect.com.au 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)

Cheapest Life Insurance for Females

Source: Lifeinsurancedirect.com.au 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.