How much does life insurance cost?

How much does life insurance cost?

The cost of life insurance in Australia can vary depending on factors such as your age, gender, lifestyle choices (such as whether or not you smoke) and how much insurance you’re taking out (i.e. your ‘sum insured’ amount).

Men will generally pay more than women for life insurance. According to Canstar’s latest research, a non-smoking woman in her 30s would pay just under $29 a month on average for a direct life insurance policy with a benefit of $500,000. In comparison, a non-smoking man in his 30s would pay nearly $39 a month on average for the same amount of cover.

You can use Canstar’s life insurance comparison tool to quickly and easily review a wide range of policies to find one that’s right for you.

To give you an idea of life insurance costs for men and women of different age groups and smoking statuses, Canstar Research has calculated the average monthly premiums across the life insurance providers we rate.

Average monthly direct life insurance premiums

← Mobile/tablet users, scroll sideways to view full table →

Source: www.canstar.com.au. Based on quotes obtained for products rated in the Canstar 2025 Direct Life Insurance Star Rating (May 2025). Monthly premiums are based on a cover amount of $500,000.

It’s important to note that price isn’t everything. If you decide to take out life insurance, you should also consider the type of life insurance available, the level of cover and whether any exclusions apply. You might also consider whether you wish to bundle your term life insurance with other types of life insurance such as Total and Permanent Disability (TPD) insurance, trauma insurance or income protection cover.

It’s also important to read any relevant documentation, such as the Product Disclosure Statement (PDS) and Target Market Determination (TMD), for any policy you’re considering.

If it looks like you may be paying too much for your life insurance, or you think you’re not getting enough coverage for your premiums, it may be time to shop around and compare your options with Canstar.

Canstar’s Direct Life Insurance Star Ratings also compares both the cost and features of the direct life insurance products in our database. By choosing a 5-Star Rated product, you may be able to save money on your monthly life insurance premium.

Average monthly direct life insurance premiums – 5-Star vs rest of the market

← Mobile/tablet users, scroll sideways to view full table →

Source: www.canstar.com.au. Based on quotes obtained for products rated in the Canstar 2025 Direct Life Insurance Star Rating (May 2025). Monthly premiums are based on a cover amount of $500,000.

What factors can affect my life insurance premiums?

The cost of life insurance typically depends on a range of factors, including some you can control and some you can’t. A provider will generally consider:

• Your age

• Your gender

• Your smoking status

• Your current health and medical history (i.e. pre-existing medical conditions)

• Your occupation and any associated risks

• Your personal pastimes and hobbies

• How you purchase your cover (e.g. directly from an insurer, via a financial adviser or as part of your superannuation)

• The type of cover you take out (e.g. if you bundle life cover with TPD, trauma cover or income protection)

• The sum insured amount of cover you take out.

You might like to use Canstar’s Life Insurance Calculator to get an estimate of how much cover you may need.

Your insurance provider may give you the option of choosing between stepped or level premiums. Stepped premiums increase each year as you age and become statistically more likely to make a claim. Level premiums stay the same over time, but may initially be more expensive.

How can I make my life insurance premiums cheaper?

If you’re looking for ways to manage the cost of your life insurance, a good place to start is to shop around and compare products from a variety of providers. Some life insurance providers may offer discounts and special offers to new customers. For example, you might be able to get a discount if you pay your premiums annually instead of monthly, or if you take out a joint policy.

It may also be a good idea to review your policy from time to time. Check the level of cover you have is suitable for your specific situation and that you’re not paying for more than you need. Canstar’s Research Team has crunched the numbers and by choosing a 5-Star Rated product, you can save up to 63% on your premiums compared to the average non 5-Star rated policy.

You may also already have life insurance provided through your super, as many funds automatically provide members with death and TPD cover. However, since legislative changes in 2019, life insurance is now offered through super on an opt-in basis, rather than an opt-out basis, for members under the age of 25 and those with balances of $6,000 or less.

It’s worth checking with your super fund to ensure that you aren’t unnecessarily doubling up on your cover. Cover through your super can be cancelled if you wish to take out a policy from a different provider.

How does my job affect my life insurance?

Any default life insurance you have through your super should not be affected by your job, regardless of how high-risk or hazardous it is. However, life insurance providers generally consider dangerous jobs or risky hobbies when calculating your risk profile. This means life insurance outside of super will generally charge higher premiums for certain occupations.

The Financial Services Council (FSC), which sets the standards for the life insurance industry, has released an enforceable standard (FSC Standard No. 27) that removes occupational exclusions and occupation-based restrictive disability definitions in default life insurance cover in superannuation. The aim is to make sure people are able to claim on default group life insurance cover even when they change jobs and are stapled to a fund under the Federal Government’s recent Your Future, Your Super reforms. But this standard does not apply to life insurance outside of your super.

Real Insurance lists some common high-risk jobs and the reason why they may affect a policy. They include:

• A miner working underground and around large, dangerous machinery

• A construction worker, especially one handling dangerous machinery or on multi-storey building sites

• A person serving in the armed forces, whether it’s the army, navy or air force

• A doctor or nurse as healthcare workers are more frequently exposed to diseases.

Fellow life insurance provider NobleOak says your level of risk may depend on whether you’re a white-collar or blue-collar worker. It gives the example where a window cleaner working at heights or a miner working underground could be exposed to a higher level of risk than an accountant, teacher or other white-collar professional. “Some occupations may be uninsurable for certain covers such as abattoir workers or someone in the armed services dealing with special hazards,” it adds.

If you work in a profession that your life insurance provider considers dangerous, you may consider taking out income protection insurance, as this may help supplement your income if you were to become sick or injured for a period of time. Your superannuation fund may already provide you with a form of income protection or you may wish to take out a separate policy.

If I quit smoking will it reduce my life insurance premiums?

If you’re a smoker and you’re able to quit, this could reduce your life insurance premiums considerably, in addition to any health insurance costs.

If you’ve kicked the habit for good, consider contacting your life insurance provider to ask them how to change your smoking status to non-smoker. Keep in mind that an insurance company will generally consider you a non-smoker if you have not smoked in the last 12 months (which may also include vaping). This can vary between insurers so you may want to check your policy’s PDS or speak to your provider directly to confirm.

It’s important to note that there can also be consequences for not disclosing to your insurer that you smoke, even if it’s only occasionally. If you’re untruthful with your insurer it could lead to your policy being cancelled, your claims being denied or your beneficiaries receiving reduced payouts.

Are my life insurance premiums tax-deductible?

Unfortunately, you can’t claim a tax deduction for any life, trauma or critical care insurance premiums. The Australian Taxation Office (ATO) advises that premiums paid under a policy to compensate you for things such as a physical injury are not tax-deductible. In contrast, you’re generally able to claim on any premiums you paid for insurance against the loss of your income (such as income protection insurance). But you must include any payment you received under the policy in your tax return.