How Much Does Life Insurance Cost?

What does life insurance cost? It’s a question we’re often asked at Canstar and it’s similar to asking, “What length is a piece of string?”

Whether you work on a construction site, in a warehouse, a store, a café, an office cubicle, or the corner office, life insurance can give you and your loved ones financial peace of mind if something were to happen to you.

Check your current life insurance premiums against the market average in 2017, based on Canstar’s expert ratings and analysis.

What does life insurance cost?

It depends on whether you choose to buy life insurance directly from the insurer or through a financial adviser. We discuss other factors that affect the cost of life insurance premiums below.

Premiums have stayed mostly stable over the past year, and non-smokers can expect to pay the following premiums for life insurance policies in 2017. The table below shows the better the Canstar star rating, the more affordable the insurance premiums are likely to be:

Profile Average Monthly Premium
for 5-star rated products ($)
Average Monthly Premium
for market ($)
Average Monthly Premium
for 1- and 2-star rated products ($)
20s Female Non-Smoker 19.41 33.91 46.78
20s Male Non-Smoker 34.83 49.36 61.36
30s Female Non-Smoker 24.25 37.56 49.13
30s Male Non-Smoker 28.10 48.32 64.50
40s Female Non-Smoker 42.54 67.61 90.29
40s Male Non-Smoker 49.40 81.75 102.57
Early 50s Female Non-Smoker 77.89 125.21 163.98
Early 50s Male Non-Smoker 101.42 163.66 201.22
Late 50s Female Non-Smoker 134.69 204.55 253.03
Late 50s Male Non-Smoker 191.20 297.07 371.13
Source: Canstar 2017 Direct Life Insurance Star Ratings and Awards.

Based on $500,000 cover for policies rated by Canstar in 2017.

If it looks like you’re paying too much for life insurance, or you think you’re not getting enough coverage for your premiums, it may be time to shop around for a better deal.

A recent survey of more than 1,000 people by one of our two winners of an Outstanding Value Direct Life Award, NobleOak, found 83% of customers say price is their key deciding factor when buying life insurance. Price was well ahead of product features (62%), claims reputation (55%), and service levels (32%).

In fact, lower premiums was the main reason why consumers switched to a new life insurance policy (36%).

Of course, as we’ve mentioned, price isn’t everything, and other reasons consumers identified for switching policies included superior products (18%) and better service (6.9%).

The table below shows a sample of the policies sorted by our star ratings (highest- lowest) available on Canstar’s database for a 30-year-old male in a professional occupation, who is a non-smoker.

Compare Direct Life Insurance

What factors affect life insurance premiums?

The amount that you pay in insurance premiums for life insurance may be influenced by the type of cover and amount of cover you take out, your age, gender, medical conditions, and lifestyle. That’s a lot to consider!

Life insurance premiums can be affected by:

 What does life insurance cost The amount of insurance you require (use our Life Insurance Calculators 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 each of these factors in more detail in this article.

Compare Direct Life Insurance

How can you make life insurance cheaper?

Dangerous occupations or risky hobbies are also red flags to insurers. Avoiding lifestyle choices viewed as “risky” by insurers can slice a big chunk off your monthly direct life insurance premium.

But even if you don’t want to give up working in an underground mine or using freestyle rock climbing to relax, there are other, relatively more mundane, things you can do to lower your insurance premiums.

First of all, if you’re a smoker, there’s never been a better time to quit!

Smoking makes a big difference

According to the latest figures from the ABS National Health Survey (2014-15) and the Australian Institute of Health and Welfare, 14.7% of the Australian population aged 18 years or over – that’s more than 1 in 10 Aussies – are smokers.

Thankfully, this shows more and more people are quitting and stay quitted, since in the 2011-12 National Health Survey, 20% of Australian adults were smokers.

Quit smoking and you could drastically reduce how much you pay in premiums for life insurance, as you can see from the table below.

Profile Average Monthly Premium
for 5-star rated products ($)
Average Monthly Premium
for market ($)
Average Monthly Premium
for 1- and 2-star rated products ($)
20s Female Non-Smoker 19.41 33.91 46.78
20s Female Smoker 26.20 53.00 68.73
20s Male Non-Smoker 34.83 49.36 61.36
20s Male Smoker 51.94 80.49 113.40
30s Female Non-Smoker 24.25 37.56 49.13
30s Female Smoker 40.59 61.20 78.34
30s Male Non-Smoker 28.10 48.32 64.50
30s Male Smoker 54.42 88.34 113.26
40s Female Non-Smoker 42.54 67.61 90.29
40s Female Smoker 80.97 122.96 159.10
40s Male Non-Smoker 49.40 81.75 102.57
40s Male Smoker 106.34 167.87 213.75
Early 50s Female Non-Smoker 77.89 125.21 163.98
Early 50s Female Smoker 159.19 227.50 292.43
Early 50s Male Non-Smoker 101.42 163.66 201.22
Early 50s Male Smoker 210.92 333.31 413.23
Late 50s Female Non-Smoker 134.69 204.55 253.03
Late 50s Female Smoker 258.56 359.80 455.89
Late 50s Male Non-Smoker 191.20 297.07 371.13
Late 50s Male Smoker 403.94 574.27 736.33
Source: Canstar 2017 Direct Life Insurance Star Ratings and Awards.

Based on $500,000 cover for policies rated by Canstar in 2017.

Males, in particular, are hit with a high loading for lighting up. On average, premiums for male smokers in their forties or early fifties are more than twice as high as those for their male buddies of the same age who don’t smoke.

If you were a smoker when you signed up for life insurance and have since quit, don’t keep watching your money go up in smoke. Phone your direct life insurance company and ask them how to change your smoking status to non-smoker.

By the way, an insurance company’s definition of a non-smoker is any person who hasn’t smoked for the last 12 months!
If you are considering direct life insurance, you can compare what’s available in our comparison table below with direct links to the providers website. This table is based on a female aged 30-39 years old, who works in a retail occupation group, and is a non-smoker. The table is sorted by star rating (highest to lowest).

Compare Direct Life Insurance

How to quit smoking

If you would like help to QUIT and stay quit, the government’s Quitline program is reported to be highly successful.

Their My QuitBuddy app (available on Apple, Android, or Windows smartphones and tablets) is a personalised helper that helps you set goals, track your progress, and stay motivated to quit.

Mums can even download an app designed to help them quit smoking, called Quit For You: Quit For Two, on Apple iPhone, iPad, or Android devices.

If cheaper life insurance isn’t enough of a reason to quit smoking, check out the Quitline and Cancer Institute of NSW’s iCanQuit Calculator. This calculator can show how your habit could be stopping you from going on an overseas holiday, buying a new TV, a set of wheels, or even an engagement ring. Quit now and watch as the savings roll into your account – and stay there!

Compare Direct Life Insurance

Of course, there’s so much more to life insurance than just finding the cheapest price – which is why Canstar is here. We aim to help Australians get the best possible coverage and policy terms and conditions, all at an affordable premium.

Find out what features to look for in an outstanding value life insurance policy – or dive straight into comparing life insurance policies:

Compare Direct Life Insurance

So what do you need to know about life insurance in 2017? Find out by reading the rest of our 2017 Direct Life Insurance Star Ratings report:

Direct Life Insurance Star Ratings – Canstar

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