How Much Is Life Insurance in Australia?
Most life insurance policies in Australia cost between $25 and $300+ per month, depending on your age, gender, cover amount and policy type.
Cashback arrangements can reduce the costs by 12.5%.
And it's not always cheaper to hold life cover through super - our comparison of 10 super funds vs retail shows the break-even shifts with age.
Compare Life Insurance Options in Australia
There are four main types of life insurance commonly used in Australia. Each type serves a different purpose depending on your financial situation.
| Cover Type | Best For | How It Pays | Typical Use | Indicative Cost |
|---|---|---|---|---|
Life CoverView details | Families, debt protection | Lump sum | Mortgage, dependants, future expenses | From ~$25/month |
TPD InsuranceView details | Long-term disability protection | Lump sum | Medical, rehab and ongoing living costs | From ~$40/month |
Income ProtectionView details | Replacing income if you are ill or injured | Monthly payments | Ongoing bills and income replacement | From ~$30/month |
Trauma CoverView details | Serious illness events | Lump sum | Treatment, recovery and time off work | Varies |
How does life insurance work in Australia?
In Australia, life insurance is regulated by two bodies. The insurance companies themselves are regulated by APRA, which makes sure insurers are financially sound, treat customers fairly, and have enough capital to pay claims. The companies that arrange life insurance for customers, like Keep, are licensed and regulated by ASIC under an Australian Financial Services Licence.
Licensing carries obligations, including:
- Selling only to people who are likely to be able to claim
- Maintaining education on current laws, regulation and products
- Ensuring advertising is true and correct, and that any claims made can be substantiated
- Putting customer interests first, including managing any conflicts of interest
Licensees can't accept payments that would conflict with customer interests. Commissions on life insurance are permitted but are capped under the Life Insurance Framework (60% upfront, 20% ongoing), and any commission arrangement must be disclosed. See how commissions work in Australia →
Ways to buy life insurance in Australia
There are three main ways to buy life insurance in Australia.
Through super
Most working Australians already have some default cover through their super fund. It's the easiest entry point and there are usually no health questions to answer, but cover amounts are often lower than people realise and premiums rise sharply with age.
Retail arranged
Policies bought through a licensed adviser or comparison service like Keep. These are fully underwritten at application, which means more rigorous questions upfront but stronger claims certainty later. Retail policies tend to have richer features and broader definitions than super default cover.
Direct
Policies bought straight from an insurer, often through TV advertising or call centres. Products are designed to be sold "over the phone", with underwriting lighter at application but more rigorous at claim time, which shows up in the claims-paid statistics further down.
The process of applying for life insurance
When you submit an application you'll complete a personal statement. This is usually either a secure online form or a phone call with an underwriter (tele-underwriting). The statement gathers information about your occupation, lifestyle, family medical history, personal medical history and financials.
Every insurer has a slightly different question set, and the questions vary depending on the cover you're applying for. Income protection applications focus more on income. TPD applications focus more on occupation and lifestyle.
Depending on your answers, you may need to provide additional information. That's usually medical tests or financial evidence. The insurer typically arranges these through a third party, but you can often use your own doctor.
An underwriter then reviews your full application and decides what terms to offer. Often that's exactly the terms you applied for. In some cases they may apply a loading, where you pay a little more, or an exclusion, where a specific condition is excluded from your cover. Loadings and exclusions can usually be reviewed after two or three years if your health stays clear.
What's the purpose of underwriting?
Insurance is basically a shared pool of money that everyone in the pool can draw on if something happens. The insurer maintains that pool, so if you have a higher likelihood of claiming, it's only fair for everyone if you pay a little more, or have the additional risk excluded. The aim being each person contributes a fair amount to the shared pool.
It's also why default cover through super can get expensive in later years. Entry to that pool is much easier with more people paying the same amount (so therefore fewer people paying a loading or having an exclusion), so the cost gets averaged across everyone in the fund regardless of individual risk. See how super cover compares →
After your policy starts
Once underwriting is complete your policy goes into force. You have a cooling-off period, generally 28 days but it varies by insurer, where you can cancel and have your premium returned (excluding any government fees or taxes).
Suicide exclusion. Most life cover policies in Australia have a 13-month exclusion for death by suicide. Claims made as a result of suicide within the first 13 months of the policy starting won't be paid. This is standard practice across the industry, designed to prevent policies being taken out with the intention of claiming. After 13 months the exclusion typically lifts.
Other cover types have their own qualifying or waiting periods at the start of a policy. See our income protection and TPD pages for the specifics.
Claiming on your life insurance policy
The claims process differs by product type. Life cover is the simplest, usually a death certificate and proof of identity. TPD and trauma are more complex because you're proving a medical state rather than an event, and income protection sits in between. Proving you're never going to be able to work again is naturally harder than registering a death.
The process generally starts with a diagnosis from your doctor or an event or accident, then notifying your insurer as soon as possible. They'll usually assign a claims consultant to work with you through the rest of it. You'll be asked to provide documentation. That's proof of earnings or financials for income protection, and medical reports or specialist opinions for TPD or trauma.
What about the claim actually being paid? There is a perception that insurers try not to pay claims. The evidence in Australia is that they do. APRA tracks claims outcomes and disputes and scrutinises insurers who don't appear to be doing the right thing. The most recent figures (Life Insurance Claims and Disputes Statistics, 2024) show 97% of retail life cover claims and 95% of retail income protection claims were paid. For policies bought direct the numbers are lower, at 92% and 87% respectively.
There's also significant variance from insurer to insurer that's worth understanding before you choose one. See our analysis of insurer dispute rates →
Who is life insurance for in Australia?
If your income stopped tomorrow, who would be affected, and how long could they manage without it? These are the questions that go to the heart of why people need life insurance.
Families with dependants
This is the obvious one. If people rely on your income, whether that's children, a spouse, or ageing parents, life insurance is worth serious consideration. The questions to work through:
- How long could your savings, emergency funds or other safety nets keep your family afloat whilst maintaining a comparable standard of living?
- Are there investments or assets you'd be willing to sell to free up cash, and what would that cost in the long run?
- What's the likely impact on your plans for retirement, children's education, or care for ageing parents?
Life insurance allows you and your family to maintain your lifestyle, without having to forcefully sell assets, and without impacting your future plans, if the worst happens.
Mortgage holders
A mortgage is typically a 25 to 30-year financial commitment, built on your current income and what you expect to earn in future. If that income is disrupted, how do you keep meeting it? The worst case is being unable to work and having to sell your home in a depressed market. Income protection often does more heavy lifting here than life cover alone, but a combination is common. See how mortgage protection compares to life insurance →
Single-income households
The pressure on a single-income household is real, and insurance can feel like a luxury you can't afford. The risk to your lifestyle and your family in the event of illness or injury can be catastrophic. Even if your partner could return to the workforce, can they realistically replace your income? If you couldn't manage day-to-day living independently, who covers childcare or home help?
Not happy thoughts. Very real risks.
Near-retirees (50s and early 60s)
If you're approaching retirement the calculation shifts. Your mortgage may be smaller, the kids may be independent, however this is often the time people are able to build up their nest egg for retirement. Life cover often becomes less essential than it was a decade earlier, however TPD and trauma cover can still be valuable when health issues become more likely and you're not yet drawing retirement income. Income protection also tends to peak in importance here. See income protection in your 50s →
No dependants
If no one relies on you financially, it's easy to assume you don't need insurance, and to a degree that's true. You often don't need life insurance. But income protection and TPD are different. They also protect you, not the people around you.
- How long would your sick leave and emergency savings last if you weren't earning?
- Do you have an extended family or friends who could realistically support you through a long health crisis?
- In a scenario where you'd never work again, what does your life look like, and who carries it financially?
Life insurance allows you to maintain your lifestyle to the extent possible without having to impose, financially or otherwise, on your extended family or friends.
Not sure what cover applies to your situation? Our calculator returns a tailored estimate in under 60 seconds, no email or phone number required.
Use the calculatorWhy Compare with Keep Insurance
What you get with Keep
- ✔Compare multiple insurers side by side
- ✔See real-time quotes 24/7 without needing a phone call
- ✔Get 12.5% of premiums returned
- ✔Apply online or get support if needed
See how real customers have structured their cover in our client case studies .
What we see in real quotes (Australia)
- •Premiums can vary by 2-3x for the same person and cover, it's worth comparing options
- •Smoking can increase premiums significantly, often by 30-100%. But quitting can flow through to pricing
- •Income protection pricing varies significantly by occupation
- • Policy structure matters - paying from super, choosing stepped vs level, and whether to hold cover inside or outside super can all shift long-term cost. See how super compares to retail.
Built on real pricing data from Australian insurers.
What Should You Do Next?
How to Compare Life Insurance Policies
The four main types of life insurance cover different risks:
- Life cover - supports your family financially if you pass away
- Income protection - replaces income if you can't work due to illness or injury
- TPD insurance - provides a lump sum if you're permanently unable to work
- Trauma insurance - helps cover costs during serious illness
When deciding what to cover, consider:
- Do you have dependants (partner, children, ageing parents) that rely on you financially?
- Could you manage financially if you couldn't work for an extended period?
- Do you have debts or ongoing financial commitments?
Not sure where to start? Use our life insurance needs calculator to guide you through the key considerations.
Frequently Asked Questions
What type of life insurance do I need in Australia? +
Most Australians benefit from a combination rather than a single product. Life cover protects dependants if you die; income protection covers you if you can't work; TPD covers you if you can never work again; trauma cover supports recovery from a serious illness.
Younger people with debts and dependants typically need life cover and income protection. Single people without dependants may need income cover and TPD but not life cover.
Why do life insurance premiums vary so much? +
Four main things drive most of the variance. First, where you buy the policy from - through super, direct from an insurer, or from a broker / adviser. Second, the features and definitions in the policy, which affect both the price and how likely a claim is to be paid. Third, the policy structure you choose, particularly age-stepped vs level premiums, and whether you hold cover inside or outside super. Lastly, different insurers price the same age, gender, smoker status and occupation very differently because they target different parts of the market.
Two people of the same age and health can be quoted prices 2 to 3 times apart for cover that looks similar on the surface. See our costs page for the typical price range by age and how the main drivers stack up.
How do cashback arrangements impact life insurance costs? +
Cashback arrangements reduce the effective cost of cover, with the effective cost being the premium you pay minus the cashback you receive. This makes a meaningful difference over the life of a policy. A premium cashback returns a portion of the commission that would otherwise be paid to the adviser. At Keep, that's 12.5% of premiums paid each year, for the life of the policy, while some other providers have cashback arrangements that only apply to the first year's premium. See how Keep's commissions and cashbacks work.
What is the cooling-off period for life insurance in Australia? +
Most Australian life insurance policies have a 28-day cooling-off period from the date the policy starts, during which you can cancel and have your premium refunded, less any government taxes or fees. Some insurers may offer a slightly longer period.
Does life insurance pay out for suicide in Australia? +
Yes, but not in the first 13 months. Most life insurance policies in Australia have a 13-month suicide exclusion at the start of the policy. Claims arising from suicide within that window are not paid. After 13 months the exclusion lifts and the policy pays in the same way as for any other cause of death. This is standard industry practice in Australia and is designed to prevent policies being taken out specifically with the intention of claiming.
Can I have life insurance through my super fund? +
Yes, and many Australians already do. Default cover through a super fund usually includes some Life and TPD insurance, and sometimes income protection. The premiums are paid from your super balance rather than out of pocket.
When you're young, super-default cover can be the cheapest and easiest entry point and requires no health questions, but the cover amounts are often lower than people expect, and premiums rise sharply as you get older. Retail policies are usually more flexible and have richer features. See our deep dive on life insurance in super and how super and retail cover compare.
How do binding vs non-binding beneficiary nominations work? +
If you hold life insurance through super, you can usually nominate who receives the payout if you die. A binding nomination tells the super fund trustee exactly who must receive the benefit, and the trustee has to follow it, provided it is valid and current. A non-binding nomination is a preference, and the trustee makes the final call after considering your circumstances.
Binding nominations generally expire after three years and need to be renewed. For retail policies held outside super, the payout normally goes to your estate and is distributed through your will. See life insurance in super for how this affects claims.
Is life insurance worth it in Australia? +
In short, yes if you or your dependants would have a financial gap if something happened to you.
For people with dependants, a mortgage, or a single-income household, life insurance is one of the more straightforward ways to protect against catastrophic financial outcomes. For people without dependants, life cover is often less essential, but income protection and TPD can still matter because they protect you.
APRA data shows the vast majority of retail life and IP claims are paid, so the protection is real if you choose your insurer carefully. See our analysis of insurer dispute rates for what to look for.