Life Insurance Calculator
This calculator is designed to provide you with an estimate of how much life insurance and income protection cover you may need in the event that you die, suffer a trauma, become totally and permanently disabled (TPD) or if you become unable to work.
Please note the results provided by this calculator are an estimate only. Consider whether you need financial advice from a qualified adviser.
How much life insurance do you need?
How much life insurance you need depends on your personal circumstances, including your life stage and the type of life insurance you want – such as cover for death or terminal illness (often referred to as death cover), or cover if you are unable to work. In Australia, you can switch policies and even hold multiple policies. Moneysmart suggests weighing up how much cover your family may need, as well as how much they would receive, plus checking if you’ve got life insurance through your super fund. You can also read some tips from one of our life insurance experts on how to choose a policy.
How do you calculate the cost of life insurance?
Calculating life insurance premiums can be complex, because what you’ll pay could change based on factors such as the type of insurance you take out, the extent of your cover and the insurance provider you choose, as well as your medical history and if you are, or have previously, smoked. Your occupation is another typical factor that may influence your premiums. Canstar’s calculator could help you get started, as it highlights some of the key elements you may wish to consider. You can also compare life insurance with Canstar.
How much should death cover cost?
Prices for death cover vary based on factors including your age, whether or not you smoke, your job and your gender. Canstar research shows that choosing an Award-winning life insurance policy could help you save money. For a non-smoking female in her 30s taking out $500,000 worth of cover at the time of writing, the savings could be more than $175 annually on average.
Should I choose level or stepped life insurance premiums?
Keep in mind that pricing for life insurance will vary depending on a range of factors, including whether you opt for stepped premiums or level premiums. According to Moneysmart, here are the key differences between the two:
- stepped premiums — recalculated at each policy renewal, usually increasing each year based on the higher chance of a claim as you age
- level premiums — charge a higher premium at the start of the policy, but changes to cost aren’t based on your age so increases happen more slowly over time
What is a pre-existing condition for life insurance?
When you apply for life insurance, make sure you read the fine print and be honest with your insurance provider about any pre-existing conditions you have. Typical conditions, ailments and illnesses that might be considered a pre-existing medical condition include asthma, cancer, depression, diabetes, high blood pressure, heart disease, kidney or liver disease, certain mental health conditions, or a stroke.
Does insurance cover old age?
Death cover, which is also known as term life insurance, usually covers you for death from natural causes, but ‘old age’, in itself, is not a medical condition. Life insurance providers usually consider your age, along with different factors like whether you have any pre-existing conditions, in assessing your application and setting your premiums. On Canstar, you can find out more about life insurance for over-50s and life insurance for seniors over 60. What’s covered by any particular life insurance policy can vary, so always take the time to read the product documentation first. You can speak to an insurance provider if you have any questions.
How much does life insurance usually cost?
Canstar research suggests the average monthly direct life insurance premium and cost for a life insurance policy with a $500,000 sum insured amount starts from as low as about $32 for a non-smoking female in her 20s, and goes up to about $593 for a smoking male in his late 50s, based on quotes for Canstar’s 2021 Direct Life Insurance Star Ratings (May 2021).
What matters with life insurance?
Keep in mind that price isn’t everything with life insurance cover. You could consider bundled cover (including total and permanent disability (TPD), trauma insurance or income protection insurance), how much cover you want, and the inclusions and exclusions of various policies when you’re weighing up your options. Speaking to a financial adviser or other qualified professional could be helpful to ensure you get the right policy for your needs and budget.
Does life insurance stop?
If you have life insurance through your super, including term life insurance or TPD cover, it can potentially end if you change funds, reach a certain age or stop making contributions. For a standalone policy, cover usually continues as long as you pay the premiums, although there is typically a maximum entry age for new policies and a maximum age beyond which you may not be able to renew an existing policy.
