How much does Advised Life Insurance cost?

CANSTAR examines the cost of life insurance with the average premiums in 2016 for term life, trauma, TPD, and income protection.

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.

 

Compare Advised Life Insurance

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:

How much does life insurance cost 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.
Life insurance claims based on current health and medical history

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.

Compare Advised Life Insurance

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 life insurance

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.

Read more about Life Insurance

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