Which life insurance policies offer outstanding value in 2022?

If you’re looking to take out some life insurance, you might want to consider who’s come out on top in this year’s Direct Life Insurance Star Ratings and Awards.

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The past few years of dealing with the challenges of the coronavirus pandemic and now the threat of rising inflation and interest rates have reminded many of us of the importance of our family and loved ones.

If you’re wondering what the future might hold and how to prepare for it, you might well decide it’s time to consider some new life insurance cover. Or, if you already have a policy, it might be time to look at how it compares to other policies on the market, to make sure it still covers your needs.

If you are considering your life insurance needs at the moment, Canstar Research has assessed and rated 14 policies from 14 brands on our database and has identified the ones offering outstanding value to consumers.

The research team found it’s possible to make savings of hundreds of dollars a year by choosing a 5-Star Rated policy.

How are policies assessed?

For Canstar’s Life Insurance Star Ratings, policies on our database are assessed on both price – monthly premiums – and a range of features such as ease of application, payment options and comprehensiveness of cover.

Each policy is rated against 20 different consumer profiles broken down on the basis of age group, gender and smoking status.

Policies are assigned a total score in each profile, 70% of which is weighted according to the price score and 30% of which is weighted according to the feature score. The policies that perform to a high standard in individual profiles are given a 5-Star Rating.

Canstar awards an Outstanding Value Direct Life Insurance Award to the providers or brands found to offer outstanding value based on their cumulative score and Star Ratings performance across all 20 direct life insurance profiles. You can find out more in the methodology.

How much could I save with a 5-Star Rated life insurance policy?

When the different policies were compared to each other as part of Canstar’s research, the lowest-cost policy in each profile was awarded the highest price score. That means there’s a good chance you could save on monthly premiums if you opt for a 5-Star Rated policy.

Canstar has crunched the numbers to show what savings may be possible.

For example, if you’re a woman in your 30s who doesn’t smoke, the average monthly premium of our two 5-Star Rated insurance policies was around $19.07, for $500,000 worth of coverage.

The average premium for a policy that received a rating of four stars or lower was $35.32 a month, so this represents a saving of $16.25 a month. This means a 5-Star Rated policy could potentially save you up to $195 annually.

If you’re a woman aged in your 40s who doesn’t smoke, the average monthly premium of our three 5-Star Rated life insurance policies was around $32.20, for $500,000 worth of coverage, compared to an average $68.19 from the rest of the market.

This means a 5-Star Rated policy could potentially save you up to $35.99 a month or $431.88 a year.

Average monthly direct life insurance premiums

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Source: Canstar Research. Table prepared May 2022, based on the Canstar 2022 Direct Life Insurance Star Ratings (May 2022). Monthly premiums are based on a cover amount of $500,000.

If you are thinking of taking out a new life insurance policy, or moving to a new policy, you should check any relevant Product Disclosure Statement (PDS), the Target Market Determination (TMD) and other documents available from the provider.

2022 Outstanding Value Award-winning life insurance providers and brands

The three winners of this year’s Outstanding Value Direct Life Insurance Award are NobleOak, RAC and TAL. For NobleOak, this is its seventh consecutive win.

Canstar Research said all three brands stood out on price compared to other eligible brands, with the cheapest policy in every profile this year being offered by either NobleOak or TAL. The winners’ policies also tended to perform strongly on features compared to others on the market.

NobleOak

The Canstar research team said NobleOak received 5-Star Ratings across all 20 of the assessed profiles. NobleOak’s policies were found to be at or near the most affordable end of the market across the board, particularly for policyholders in younger age groups. On the features side, its offerings were also among the strongest of the providers considered for our awards.

RAC

RAC has partnered with NobleOak, which is the issuer of RAC’s life insurance policy. Like NobleOak’s, this policy is competitively priced and offers consumers a strong feature proposition that sees RAC recognised for offering outstanding value to its customers in 2022.

TAL

TAL introduced a new product, Accelerated Protection, which helped it become an award winner in 2022. This product performed strongly on price competitiveness in the middle aged and older profiles.

Canstar’s research team said TAL’s new product was also a market leader on features, with instant applicant approval and a repatriation benefit of up to $35,000 helping it stand out.

Main image source: Dmitry Molchanov/Shutterstock.com.

About Canstar’s Research team

Canstar’s Research team provides the expertise that powers our Star Ratings and Awards, designed to help consumers make better-informed financial decisions. As Australia’s biggest financial comparison site, Canstar researches and rates products from more than 775 brands, across more than 30 finance categories. Our expert researchers analyse each product we rate by comparing price and features, with the top products being recognised with a 5-Star Rating. Our Star Ratings are made available for consumers to view for free via Canstar’s comparison tables. Providers whose products perform strongly in our Star Ratings may be recognised with an Outstanding Value Award.

→ Discover Canstar’s latest Star Ratings and Award winners