Looking around for life insurance quotes? Let us do the hard work for you. Here at Canstar we’ve just performed our annual ratings of Advised Life Insurance policies, rating 91 policies from 13 providers.
We can tell you that over the past year, some prices went up, and some prices went down, but the average premiums have stayed roughly the same (with about a $1 shift) over the past 5 years. This shows the cost of life insurance is stable and may even be becoming more reasonably priced over time. So it may not be as expensive as you expect.
How much does life insurance cost?
As with other types of insurance, the premium you are charged is based on the likelihood of you making a claim. So the cost of life insurance – which includes term life, trauma, total and permanent disability (TPD), and income protection – is affected by:
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The amount of insurance you require (use our Life Insurance Calculators below to get an estimate) |
| The terms of your policy (read the PDS) | |
| Your current health and medical history | |
| Your occupation and the risks associated with it | |
| Your hobbies and the risks associated with them | |
| Smoking vs. non-smoking | |
| Your gender | |
| Your age | |
| The need for the insurance company to cover their costs plus make a small profit |
We’ve explained these factors in more detail below, and outlined the cost for the various cover options under the life insurance umbrella – term life, trauma, TPD, and income protection – in the tables at the end of this article.
Your current health and medical history
Your medical history and current state of health is a crucial part of the calculation for the likelihood of you making a claim on your life insurance. Your weight and mental health will be an important determinant, as will the results of a current medical check, your personal medical history, and potentially any family history in relation to genetic diseases.
As a general rule, the healthier you are and the less complex your medical history, the cheaper your premiums will be.
A big part of this health assessment is now about your weight. According to the Australian Institute of Health and Welfare (AIHW), 3 in 5 Australians are now overweight or obese – that’s 12 million of us.
If your body mass index (BMI) is 30 or above, your risk of various chronic diseases and injury increases and therefore insurers will ask for more information. They may require a blood test and/or apply a more expensive life insurance premium to reflect any increased risk.
Your occupation
Your occupation – and the potential risks of death, injury, or illness associated with that role – will partially determine your insurance premiums.
For example, in income protection insurance, Canstar research has found that childcare workers pay higher premiums on average than university lecturers, thanks to the physical nature of the work and perhaps all those kids who come to kindy sick!
Similarly, a paramedic can pay more than twice as much on average than a medical specialist, for the same income protection coverage, thanks to the physically demanding nature of the work and the many hours on the road late at night.
We’ve outlined the cost of life insurance for various occupations below.
Your hobbies
Do you indulge in skydiving? Scuba diving? Jet skiing or motor racing? There are a host of leisure activities that can raise the cost of your insurance cover – or alternatively, will exclude you from coverage altogether.
Smoking vs. non-smoking: It pays to quit
There is no excuse for being unaware of the health risks associated with smoking. And in addition to the costs of tobacco, the increased cost of insurance will also be a hit to your finances. Smokers face premiums that are potentially double those of their non-smoking counterpart.
The good news is that if you kick the habit, you can apply to have your premiums lowered. To be classed as a non-smoker, you must not have smoked anything at all for a period of 12 months in a row. Even one cigarette during that 12 month period will see you classed as a smoker for insurance purposes.
Below are the monthly premiums for a smoker vs. a non-smoker at different ages. These are stepped premiums, which increase in cost as you age.
First, the cost of term life insurance – what people think of as “life insurance”, i.e. a death benefit when you pass away or are diagnosed with a terminal illness.
| Term Life Insurance Premiums Monthly Premiums ($/month) Female Term Life $1,000,000 sum insured amount |
||
|---|---|---|
| 30s Profile | 40s Profile | |
| Smoker | $73 | $140 |
| Non-Smoker | $55 | $101 |
| Difference | $18 | $38 |
| Male Term Life $1,000,000 sum insured amount | ||
| 30s Profile | 40s Profile | |
| Smoker | $101 | $213 |
| Non-Smoker | $73 | $134 |
| Difference | $28 | $79 |
| Source: www.canstar.com.au. Average premiums current as at 17 August 2016. Average premiums have been rounded to the nearest dollar. | ||
Next, income protection insurance – here we’ve compared the cost for smokers and non-smokers in different occupations as well as at different ages.
| Income Protection Premiums Female 30s Monthly Premiums ($/month) |
||||
|---|---|---|---|---|
| Sum Insured | Smoker | Non-Smoker | Difference | |
| Nurse (Blue Collar) |
$100,000 | $451 | $365 | $87 |
| Beautician (Light Manual) |
$80,000 | $276 | $221 | $55 |
| Clerk (White Collar) |
$105,000 | $154 | $124 | $30 |
| Accountant (Professional) |
$150,000 | $161 | $128 | $33 |
| Female 40s | ||||
| Sum Insured | Smoker | Non-Smoker | Difference | |
| Nurse (Blue Collar) |
$100,000 | $774 | $617 | $157 |
| Beautician (Light Manual) |
$80,000 | $500 | $399 | $101 |
| Clerk (White Collar) |
$105,000 | $401 | $319 | $82 |
| Accountant (Professional) |
$150,000 | $427 | $336 | $91 |
| Source: www.canstar.com.au. Average premiums current as at 17 August 2016. Average premiums have been rounded to the nearest dollar. | ||||
And income protection for men shows a similar trend:
| Income Protection Premiums Male 30s Monthly Premiums ($/month) |
||||
|---|---|---|---|---|
| Sum Insured | Smoker | Non-Smoker | Difference | |
| Carpenter (Blue Collar) |
$100,000 | $338 | $276 | $61 |
| Electronic Technician (Light Manual) |
$80,000 | $172 | $137 | $36 |
| Clerk (White Collar) |
$70,000 | $101 | $82 | $19 |
| Accountant (Professional) |
$100,000 | $106 | $84 | $21 |
| Male 40s | ||||
| Sum Insured | Smoker | Non-Smoker | Difference | |
| Carpenter (Blue Collar) |
$100,000 | $552 | $444 | $108 |
| Electronic Technician (Light Manual) |
$80,000 | $307 | $242 | $65 |
| Clerk (White Collar) |
$70,000 | $256 | $204 | $52 |
| Accountant (Professional) |
$100,000 | $272 | $215 | $58 |
| Source: www.canstar.com.au. Average premiums current as at 17 August 2016. Average premiums have been rounded to the nearest dollar. | ||||
Your gender and age
It goes without saying that the older you are, the higher your mortality risk.
Your gender will also play a part in determining your insurance premiums, with the comparative cost of premiums differing according to the cover chosen. As an example, life insurance tends to be cheaper for females due to their longer life expectancy. On the other hand, income protection insurance can be more expensive for females, due to a statistically higher claims incidence.
We’ve outlined the cost of life insurance by age and gender below.
How much does life insurance cost?
Let’s take a look now at the cost of the different coverage options under the life insurance umbrella. We have gathered these figures from thousands of life insurance quotes in order to find the average premiums you might expect to pay.
Cost of term life insurance
| Term Life (Male – Stepped) Monthly Premiums ($/month) |
|||||
|---|---|---|---|---|---|
| Occupation | Sum Insured | Min | Max | Average | |
| Twenties | Professional | $750,000 | $46 | $62 | $53 |
| White Collar | $500,000 | $32 | $44 | $38 | |
| Light Manual | $500,000 | $32 | $44 | $38 | |
| Blue Collar | $500,000 | $32 | $44 | $38 | |
| Thirties | Professional | $1,500,000 | $68 | $79 | $73 |
| White Collar | $1,500,000 | $68 | $79 | $73 | |
| Light Manual | $1,000,000 | $47 | $55 | $51 | |
| Blue Collar | $1,000,000 | $47 | $55 | $51 | |
| Forties | Professional | $1,500,000 | $122 | $149 | $134 |
| White Collar | $1,500,000 | $122 | $149 | $134 | |
| Light Manual | $1,000,000 | $81 | $102 | $92 | |
| Blue Collar | $1,000,000 | $81 | $102 | $92 | |
| Fifties | Professional | $1,000,000 | $285 | $344 | $308 |
| White Collar | $1,000,000 | $285 | $344 | $308 | |
| Light Manual | $750,000 | $233 | $281 | $253 | |
| Blue Collar | $750,000 | $233 | $281 | $253 | |
| Term Life (Female – Stepped) Monthly Premiums ($/month) |
|||||
| Occupation | Sum Insured | Min | Max | Average | |
| Twenties | Professional | $750,000 | $24 | $43 | $34 |
| White Collar | $500,000 | $18 | $31 | $25 | |
| Light Manual | $500,000 | $18 | $31 | $25 | |
| Blue Collar | $500,000 | $18 | $31 | $25 | |
| Thirties | Professional | $1,500,000 | $51 | $62 | $55 |
| White Collar | $1,500,000 | $51 | $62 | $55 | |
| Light Manual | $1,000,000 | $36 | $44 | $39 | |
| Blue Collar | $1,000,000 | $36 | $44 | $39 | |
| Forties | Professional | $1,500,000 | $92 | $117 | $101 |
| White Collar | $1,500,000 | $92 | $117 | $101 | |
| Light Manual | $1,000,000 | $61 | $80 | $70 | |
| Blue Collar | $1,000,000 | $61 | $80 | $70 | |
| Fifties | Professional | $1,000,000 | $191 | $231 | $209 |
| White Collar | $1,000,000 | $191 | $231 | $209 | |
| Light Manual | $750,000 | $148 | $192 | $172 | |
| Blue Collar | $750,000 | $148 | $192 | $172 | |
| Source: www.canstar.com.au. Average premiums current as at 17 August 2016. Average premiums have been rounded to the nearest dollar. | |||||
Cost of income protection insurance
| Income Protection (Male – Stepped) Monthly Premiums ($/month) |
||||||||
|---|---|---|---|---|---|---|---|---|
| Age | Occupation | Annual Income | Min | Max | Average | |||
| Twenties | Professional | $80,000 | $44 | $70 | $59 | |||
| White Collar | $50,000 | $40 | $72 | $51 | ||||
| Light Manual | $55,000 | $66 | $114 | $83 | ||||
| Blue Collar | $80,000 | $131 | $295 | $190 | ||||
| Thirties | Professional | $100,000 | $66 | $106 | $89 | |||
| White Collar | $70,000 | $67 | $104 | $82 | ||||
| Light Manual | $80,000 | $112 | $182 | $138 | ||||
| Blue Collar | $100,000 | $210 | $432 | $276 | ||||
| Forties | Professional | $150,000 | $175 | $282 | $228 | |||
| White Collar | $105,000 | $168 | $252 | $205 | ||||
| Light Manual | $80,000 | $200 | $324 | $243 | ||||
| Blue Collar | $100,000 | $350 | $601 | $442 | ||||
| Fifties | Professional | $150,000 | $365 | $609 | $484 | |||
| White Collar | $105,000 | $354 | $542 | $435 | ||||
| Light Manual | $80,000 | $427 | $700 | $519 | ||||
| Blue Collar | $100,000 | $714 | $1,043 | $871 | ||||
| Income Protection (Female – Stepped) Monthly Premiums ($/month) |
||||||||
| Occupation | Annual Income | Min | Max | Average | ||||
| Twenties | Professional | $80,000 | $63 | $110 | $87 | |||
| White Collar | $50,000 | $54 | $111 | $76 | ||||
| Light Manual | $55,000 | $96 | $160 | $122 | ||||
| Blue Collar | $80,000 | $170 | $378 | $243 | ||||
| Thirties | Professional | $100,000 | $97 | $179 | $136 | |||
| White Collar | $70,000 | $101 | $162 | $125 | ||||
| Light Manual | $80,000 | $164 | $270 | $207 | ||||
| Blue Collar | $100,000 | $276 | $569 | $369 | ||||
| Forties | Professional | $150,000 | $268 | $493 | $357 | |||
| White Collar | $105,000 | $268 | $395 | $321 | ||||
| Light Manual | $80,000 | $302 | $527 | $372 | ||||
| Blue Collar | $100,000 | $469 | $821 | $625 | ||||
| Fifties | Professional | $150,000 | $531 | $952 | $744 | |||
| White Collar | $105,000 | $532 | $855 | $668 | ||||
| Light Manual | $80,000 | $609 | $1,046 | $775 | ||||
| Blue Collar | $100,000 | $984 | $1,533 | $1,252 | ||||
| Source: www.canstar.com.au. Average premiums current as at 17 August 2016. Average premiums have been rounded to the nearest dollar. | ||||||||
Cost of TPD (total and permanent disability) insurance
| TPD (Male – Stepped) Monthly Premiums ($/month) |
|||||
|---|---|---|---|---|---|
| Sum Insured | Min | Max | Average | ||
| Twenties | Professional | $750,000 | $30 | $40 | $35 |
| White Collar | $500,000 | $21 | $30 | $27 | |
| Light Manual | $500,000 | $27 | $43 | $36 | |
| Blue Collar | $500,000 | $32 | $55 | $43 | |
| Thirties | Professional | $1,500,000 | $58 | $81 | $66 |
| White Collar | $1,500,000 | $60 | $81 | $68 | |
| Light Manual | $1,000,000 | $43 | $78 | $64 | |
| Blue Collar | $1,000,000 | $60 | $105 | $78 | |
| Forties | Professional | $1,500,000 | $129 | $181 | $149 |
| White Collar | $1,500,000 | $134 | $181 | $155 | |
| Light Manual | $1,000,000 | $92 | $186 | $145 | |
| Blue Collar | $1,000,000 | $134 | $256 | $180 | |
| Fifties | Professional | $1,000,000 | $365 | $477 | $429 |
| White Collar | $1,000,000 | $365 | $507 | $448 | |
| Light Manual | $750,000 | $341 | $614 | $505 | |
| Blue Collar | $750,000 | $437 | $824 | $630 | |
| TPD (Female – Stepped) Monthly Premiums ($/month) |
|||||
| Sum Insured | Min | Max | Average | ||
| Twenties | Professional | $750,000 | $32 | $40 | $36 |
| White Collar | $500,000 | $22 | $30 | $28 | |
| Light Manual | $500,000 | $27 | $43 | $36 | |
| Blue Collar | $500,000 | $35 | $55 | $44 | |
| Thirties | Professional | $1,500,000 | $58 | $81 | $66 |
| White Collar | $1,500,000 | $60 | $81 | $68 | |
| Light Manual | $1,000,000 | $43 | $78 | $64 | |
| Blue Collar | $1,000,000 | $60 | $105 | $78 | |
| Forties | Professional | $1,500,000 | $103 | $182 | $146 |
| White Collar | $1,500,000 | $103 | $182 | $152 | |
| Light Manual | $1,000,000 | $92 | $186 | $142 | |
| Blue Collar | $1,000,000 | $109 | $256 | $177 | |
| Fifties | Professional | $1,000,000 | $383 | $555 | $445 |
| White Collar | $1,000,000 | $405 | $555 | $465 | |
| Light Manual | $750,000 | $338 | $614 | $522 | |
| Blue Collar | $750,000 | $502 | $825 | $650 | |
| Source: www.canstar.com.au. Average premiums current as at 17 August 2016. Average premiums have been rounded to the nearest dollar. | |||||
Cost of trauma insurance
| Trauma (Male – Stepped) Monthly Premiums ($/month) |
|||||
|---|---|---|---|---|---|
| Occupation | Sum Insured | Min | Max | Average | |
| Twenties | Professional | $200,000 | $28 | $47 | $36 |
| White Collar | $150,000 | $24 | $38 | $29 | |
| Light Manual | $150,000 | $24 | $38 | $29 | |
| Blue Collar | $150,000 | $24 | $38 | $29 | |
| Thirties | Professional | $250,000 | $44 | $69 | $53 |
| White Collar | $250,000 | $44 | $69 | $53 | |
| Light Manual | $200,000 | $37 | $59 | $46 | |
| Blue Collar | $200,000 | $37 | $59 | $46 | |
| Forties | Professional | $250,000 | $106 | $162 | $132 |
| White Collar | $250,000 | $106 | $162 | $132 | |
| Light Manual | $200,000 | $87 | $138 | $112 | |
| Blue Collar | $200,000 | $87 | $138 | $112 | |
| Fifties | Professional | $150,000 | $197 | $336 | $263 |
| White Collar | $150,000 | $197 | $336 | $263 | |
| Light Manual | $100,000 | $133 | $247 | $181 | |
| Blue Collar | $100,000 | $133 | $247 | $181 | |
| Trauma (Female – Stepped) Monthly Premiums ($/month) |
|||||
| Occupation | Sum Insured | Min | Max | Average | |
| Twenties | Professional | $200,000 | $28 | $67 | $40 |
| White Collar | $150,000 | $23 | $52 | $32 | |
| Light Manual | $150,000 | $23 | $52 | $32 | |
| Blue Collar | $150,000 | $23 | $52 | $32 | |
| Thirties | Professional | $250,000 | $45 | $93 | $61 |
| White Collar | $250,000 | $45 | $93 | $61 | |
| Light Manual | $200,000 | $38 | $80 | $52 | |
| Blue Collar | $200,000 | $38 | $80 | $52 | |
| Forties | Professional | $250,000 | $88 | $153 | $121 |
| White Collar | $250,000 | $88 | $153 | $121 | |
| Light Manual | $200,000 | $72 | $135 | $103 | |
| Blue Collar | $200,000 | $72 | $135 | $103 | |
| Fifties | Professional | $150,000 | $122 | $254 | $185 |
| White Collar | $150,000 | $122 | $254 | $185 | |
| Light Manual | $100,000 | $83 | $198 | $128 | |
| Blue Collar | $100,000 | $83 | $198 | $128 | |
| Source: www.canstar.com.au. Average premiums current as at 17 August 2016. Average premiums have been rounded to the nearest dollar. | |||||
Is paying for life insurance worth it? Well, put it this way – how else would you pay for the many demands of life if something happened? A monthly life insurance premium can be a wise investment for peace of mind – as long as you compare your options and find the right policy for you.
To find out more about life insurance from a financial adviser and compare your options, read our annual Life Insurance Star Ratings report.
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