life insurance cost

Life insurance is a contract between an insurer and you. It promises to give a certain amount of money to someone you choose after you die. Life insurance is an effective and popular way to provide your loved ones with financial protection after you’re gone.

Life insurance payout can help your beneficiary with immediate expenses after your death. These expenses may include funeral costs and medical bills. Additionally, life insurance can also cover ongoing financial responsibilities. This includes rent or mortgage payments as well as daily living expenses. It can also cover ongoing financial responsibilities like rent or mortgage payments and daily living expenses.

Typically, the first question most people have about life insurance is how much it will cost them and if they can afford it. With this in mind, this post addresses the question of how much does life insurance costs in Australia, which factors affect the price of premiums, and how you can reduce the cost of your life insurance cover.

What factors affect life insurance cost?

The cost of your life insurance is determined by your circumstances and the level of cover you require. Here are the factors that influence the cost of life insurance.

Age: one of the most significant factors determining the cost of life insurance is the policyholder’s age. This is simply because the older you get, the higher the probability of passing away and, subsequently, making a claim. As a result, depending on the type of life insurance cover you’ve taken out, insurance providers can adjust your premiums each year – to account for the increased risk.
Occupation: what you do for work can also affect the cost of your life insurance cover. Some occupations, such as construction, are riskier than others, so those who work in them are generally required to pay higher premiums.
Health: this includes your current health in addition to past medical conditions. Subsequently, you could be asked to undergo a medical evaluation to accurately determine your current state of health.
Gender: your gender (at birth) also factors into the cost of life insurance.
Lifestyle mainly refers to whether you’re a smoker and how much you drink, if at all. Unsurprisingly, smokers pay more for life insurance because of the widely-known risk factors.
Cover amount: the higher your level of cover, i.e., the higher the lump-sum amount your stated beneficiary receives, the higher the price of your premiums.
Policy structure: choosing between stepped and level premiums have a significant impact on your insurance premiums. Also, how you choose to fund your life insurance premiums are a significant way to lower your costs. Life insurance can be funded through your superannuation fund or personally. Please seek personal advice before deciding how to fund your life insurance, as there could be significant tax consequences for funding life insurance premiums from super to your beneficiary.

Life Insurance Cost Comparison

Group v Retail Life Insurance

Default life insurance cost per month policies are generally a lot more expensive than getting a retail cover that is specific to your life circumstances. Group life insurance is the type of default life cover usually found within your superannuation fund. These covers usually cost more as they do not know anything about you prior to giving you some protections and could hold more restrictions at the time of claim.

Retail life insurance is usually cheaper and has better quality coverage. How can something be cheaper and better?! Well, this is simply because your insurance is not pooled together into a massive group of risk, rather the insurer finds out everything from occupation to health about you, prior to offering you coverage. This process allows the insurer to offer better definitions at the claim as they know your pre-existing health/occupation risks and allows the insurer to be upfront about anything they may exclude from your contract.

Accident Only Life Insurance vs. Whole Life Insurance vs. Term Life Insurance

In addition to the policy’s personal attributes, as outlined above, the cost of life insurance is also determined by the type of policy, i,e., accident only life insurance v whole life insurance v term life insurance.

Term life insurance cost is a policy that lasts for a specific amount of time, or term, which is generally 10 years. This is usually offered to people with pre-existing medical conditions. Then the insurer can choose to offer you another period for 10 years or more based on their assessment.

Accident only life insurance is a policy which covers you in the event of premature death caused by an accident rather than an illness. This cover is taken up by people who have a had significantly complicated health history.

Whole life insurance is a policy that covers you generally till you choose to cancel the policy. The policies generally expire at 100 years old, however, it is very unlikely you would be holding on to life insurance policies until that age. Most people will hold on to their whole life insurance policies until retirement, extinguish all their debt, have no more financial dependents, and a whole lot more reasons. Hence, it is important to have a tailored risk strategy in place to cater to your specific needs and balance the average cost of whole life insurance.

See more: Life insurance vs. income protection

Can you reduce the cost of life insurance?

You can reduce the cost of life insurance by ensuring you:

  • Are healthy, i.e., physically fit and a healthy weight
  • Stop smoking
  • Moderate your alcohol intake

How much life insurance do you need?

After “how much is life insurance?”, the most common question people have is how much life insurance coverage they actually need; much like, the cost of life insurance in Australia, this comes down to your personal circumstances, such as:

  • Your number of dependents
  • Whether you currently work and your income
  • Savings, investments, or any other forms of income (that your beneficiary would still receive in the event of your passing)
  • Total assets
  • Total debts
  • Time until retirement
  • Current health

Life insurance calculator by K Partners

You can learn more about how much life insurance coverage you’ll need and a quote for your premiums by completing this life insurance calculator 


...Tell us a bit about yourself
How old are you?
...Your Assets
What is the total of your disposable assets ( E.g. Superannuation balance, Savings, Investments, etc. )
...Your Liabilities
How much of your debt do you want to cover in the event of your premature death?
...Lastly, let us know your expected income for you family after you pass away
How much income do you want to replace for your family per year in the event of your premature death?
How many years do you want to provide you family with an income?
How much income do you wish to leave behind for education expenses for your children each year?
How many years do you want provide the education expense?


See more: SMSF set up cost

Reasons to choose life insurance with K Partners

K Partners has a long history of helping clients in a wide range of occupations and with different financial circumstances, choose the best life insurance policy for their situation.

We’ll guarantee you get the right amount of coverage, receive the best contract terms, and purchase the cost-effective policy according to your exact needs.

For expert, impartial advice on life insurance or any other aspect of financial planning, contact us to book your consultation.

Please note that all the while the information provided above is factual in nature, it’s also intended to apply generally, and to a broad audience. Subsequently, the information hasn’t taken your personal circumstances or goals into consideration.

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