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How much does life insurance cost?

How much does life insurance cost?

The cost of life insurance in Australia is different for everyone, as premiums are based on personal factors as well as claims history for differing brands.

But when it comes to finding the right policy, keep in mind that the cost is only one aspect. It’s important to understand why some life insurance policies may be more expensive than others and why shopping for insurance should not be based on price alone. Nevertheless, it can be a good idea to know your options and one way to know the cost of life insurance is to compare quotes from various providers.

How life insurance premiums are calculated

The cost of your premium will be based on your personal circumstances and depends on several factors outlined below. Remember that no two people’s circumstances are exactly the same, so regardless of age, gender, or cover amount, your premium may not be the same as your friend’s or neighbour’s because they could have different jobs, medical histories, or lifestyles that play a role in how much their premium is.


The sooner life insurance is obtained, generally the better, because as you age and experience health issues, the likelihood increases that your insurer may apply a loading or special exclusion to your policy. You may even find that some insurers will decline to offer you cover.

Some life insurance policies are guaranteed renewable each year as long as you continue to pay your premiums when due. This means once you have a policy in place, this policy won’t be cancelled by your insurer, even if your health situation changes or you develop any new conditions after your policy starts. They also won’t increase your premiums or apply a loading or exclusions due to any new health conditions you may experience. This is one reason why it can be worth considering getting life insurance while you’re still relatively young and healthy.


According to Australia’s life expectancy, women can expect to live up to 85 years while men live to about 80 years. Due to a higher life expectancy and lower rate of serious illnesses (and thus a lower risk of death), women tend to pay lower premiums when taking out life insurance compared to males, with all other factors being equal.

However, age and gender may have a lower effect on your premiums compared to more individual factors explained below.

Lifestyle and job

Your life insurance provider will ask you about your job. If your employment is classified as ‘risky’ (such as law enforcement, fire fighter and construction), it’s likely to increase your premium.

You’ll also be asked if you engage in any dangerous activities. This includes smoking, or things like motor racing and scuba diving. If you’ve had at least one cigarette (including an e-cigarette) in the past year, generally, you’ll be regarded as a smoker. Dangerous activities and smoking will increase your premium. Depending on the insurer, certain lifestyle pursuits could attract an exclusion (meaning you won’t be covered if you die from such activities) or be deemed too risky and your application for cover could be denied altogether.

Medical history

If you or your family have a history of serious medical conditions like chronic diseases, you have a duty to take reasonable care to tell your insurer, and they’ll take these into account when calculating your premiums. As with your lifestyle, depending on the insurer and the condition, they could choose to exclude cover for that condition, add a premium loading for it (making your premium higher) or your application for cover could be denied altogether.

Cover amount

One of the most important decisions you’ll need to make when taking out life insurance is how much you’d like to be covered for. For the range of providers of cover you can get through Choosi, cover (benefit) amounts are from $10,000 up to $2 million, depending on your age and policy. As expected, a higher benefit amount will generally cost more.

When calculating the amount of cover you need it’s a good idea to take into account things like:

  • Your existing debts – personal loans, credit cards, mortgages.
  • Your existing living expenses – rent, bills, school fees, insurance, utilities, food, fuel.
  • Your partner’s ability to earn an income.
  • How many kids you have and their ages.
  • Your super balance.
  • Your existing savings and/or investment income.
  • Your paid annual leave balance.

Need help in working out how much cover you need? Check out our article on calculating life insurance or use the Moneysmart life insurance calculator.

This information is general only; doesn’t take into account your personal objectives, financial situation or needs; and shouldn’t be relied upon as advice. You should consider the relevant Product Disclosure Statement (PDS) for more information and to ensure the product suits your needs. If you have legal, tax, or financial questions, you should consult an appropriate professional.

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