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The Ultimate Guide to Finding Affordable Life Insurance in Australia

Below is a summary only of life insurance. This information is general in nature and does not take into account any individual’s financial situation, objective or needs. Further information about the general nature of this article appears in the disclaimer at the end of this article.

So, you’re thinking about getting life insurance to protect your life and loved ones, but you’re conscious of the cost. Sometimes it’s hard to balance your budget: we get it. The good news is, it’s possible to find affordable life insurance plans that are high quality too — you just need to know what to look for and where to find it.

Assessing Your Personal and Financial Circumstances

Before you start your search for the right life insurance product, make a list of your personal needs, financial commitments, and future goals. Whether you’re single and starting your career, raising a family, or planning for retirement, where you’re at in life can help determine how much insurance you need and what it could cost.

Let’s take a look at some factors to consider before purchasing life insurance.

1. Your age

    The cost of life insurance premiums will usually increase as you get older. This is because younger individuals are generally healthier and less likely to make a claim allowing insurers to charge lower premiums. Premiums usually rise as you get older to protect you against the increasing risk of health issues and a higher likelihood of making claims. Insurers factor this in when pricing your policy, so life insurance generally is cheaper at younger ages.

    2. Your work and lifestyle

      Some jobs are considered riskier than others, and this may affect the price of life insurance cover. Take construction work for example: working on a construction site using heavy machinery is generally considered riskier than a desk job in an office so you may pay more for insurance if your work is physically riskier compared to someone in an office job. You can read more about life insurance for tradies here.

      It’s the same when it comes to your lifestyle. If you’re someone who enjoys adventure sports as a hobby, you may be considered higher risk by insurers, which could reflect in higher premiums to cover you. High-risk activities might include sports such as skiing or skydiving.

      Life insurance companies will have different definitions of ‘high risk’, so comparing your options from insurers and going through the product disclosure statement (PDS) for each product will also give you detailed information to help inform your decision.

      3. Your family and medical history

        Any pre-existing medical conditions or health issues in the family history could impact the price or conditions of your life insurance. For example, a history of heart conditions may prompt the insurer to place an exclusion or loading on your policy. 

        4. Your income, financial obligations, and dependents

          The amount of cover you need will directly impact the cost of your insurance. This is how your income, financial obligations and dependants influence the price of your premiums — In general the more cover you seek based on your own situation the higher the premium. You can read more about this in our article Life insurance costs: Understanding the factors that affect your premiums.

          If you’re young and single with no dependents, your road to financial security could seem uncomplicated. However, what would happen if the situation arose where you fell sick or injured and needed weeks or months off work to recover? This is when income protection and critical illness insurance can have you covered and help you to stay financially protected. It is also important to note here that income protection is only paid for the period after expiry of the waiting period that the claimant is off work due to illness or injury. On the other hand, if you have kids, a partner, or anyone else who depends on you financially, you could think about getting life and total and permanent disability (TPD) insurance too. These insurances will help protect your family’s financial future.

          Wondering how these factors impact your cover needs? In just a few clicks, our calculator can help you work out how much life insurance you may need, based on your family and financial situation.

          Calculate your cover needs

          Researching and Obtaining Quotes from Reputable Insurers

          Once you’ve got a better idea of what could affect your insurance needs and cost, it’s time to start researching insurers. You’ll want to compare insurance quotes from various providers so you can see who’s offering a policy that best meets your cover needs and budget. There are a few ways you can do this.

          1. You can get a quote directly from an insurer’s website to see how much they charge for the level of cover you want and can purchase through them directly.
          2. You might prefer to seek the professional services of a financial adviser to tailor the right insurance plan for your personal circumstances
          3. Finding affordable life insurance through a comparator like Lifebroker. The hard work is done for you as we team up with some of Australia’s leading insurers to bring you top quality options to compare, all in the one place.

          Even better, at Lifebroker we can also support you with knowledge about different insurers products, all in one place and at no extra cost to you. Whether it’s understanding the policy features and benefits or helping you choose what product or options you want to suit your circumstances, we can help make sure you’re only paying for what you need.

          Compare affordable life insurance quotes

          Remember, when you’re looking for affordable life insurance for families, premiums would be one matter to consider as well as how comprehensive the coverage is. Make sure you read the product disclosure statement (PDS), so you know you’re getting the full cover that you expect and need. 

          Understanding the Different Types of Life Insurance Policies

          To keep your insurance affordable, it’s important to tailor your protection so you’re only paying for what you need.

          Consider the level of cover and also the types of cover that suit you. Serious illness, injury, disability and even death are life insurance covered events protected under different products. Here’s a quick rundown of the main types of life insurance products, so you can choose with confidence.

          • Life (or ‘Death cover’) insurance — Term life insurance pays a lump sum to your loved ones if you unexpectedly pass away or are diagnosed with a terminal illness where you have less than 24 to 12 months to live depending on the insurer. This offers financial protection for the people who depend on you, so they can continue to meet living costs after you’re gone.
          • Total and permanent disability (TPD) insurance — TPD pays you a lump sum if you become totally and permanently disabled and can no longer work as a result.
          • Income protection — Income protection can replace up to 70% of your regular income, paying you a monthly benefit, beyond the waiting period, if you need extended time off work to recover from an illness or injury. The waiting period is the period after illness or injury for which cover is not provided, with insurance only paid for the period after expiry of the waiting period that the claimant is off work due to illness or injury.
          • Critical illness insurance — Critical illness insurance (also known as trauma insurance) can provide a lump sum to help cover medical and everyday living expenses if you’re diagnosed with a defined illness, like cancer or a stroke. You need to meet the severity threshold of the illness set out in the PDS (for example not all heart attacks, strokes or cancers qualify for payment – it will depend on the severity criteria which are set out in the PDS).

          Knowing how each type of cover protects you should help you decide what you need, and what you don’t.

          We get that sometimes it’s easier to speak to someone, just to be sure. If you want to talk through how it all works and the available options, you can give our insurance experts a call Mon-Fri 9.00am-5:30am (AEST).

          Utilising Policy Customisation and Add-Ons to Suit Your Budget

          Some insurers may offer policies with added benefits and features attached. These policies could be more expensive because of the additional value. But if you’re on a budget and those extra features aren’t necessities for you, you may want to go for a simpler product.

          When you compare policies through Lifebroker, you can customise and mix and match features to suit your needs There are no hidden fees or extra costs that you need to pay Lifebroker. Plus, our team of specialists can happily guide you through your options for your unique requirements.

          Regularly Reviewing Your Coverage and Adjusting as Needed

          As we all know, change is the only constant in life. When you experience big life changes — like getting married or divorced, having children, receiving a pay rise, or buying property — it’s important you review your insurance cover to make sure you’re still adequately protected.

          Handy Tips to Reduce the Cost of Your Life Insurance

          When you’re purchasing your life insurance, there are a few things to keep in mind which can help reduce the cost of your premiums.

          Consider your premium structure — If you choose Stepped Premiums, the premium amount will generally increase each year as you get older. Stepped premium amounts are calculated based on your benefit amount, age at your policy anniversary and potentially the length of time you have held the policy depend on insurers. If you choose Level Premiums, the initial premium amount will be higher than Stepped Premiums but depending on how long you hold the policy level premiums over the life of the policy may be less than stepped premiums. Level Premiums are calculated based on your original benefit amount and your age when you took out your cover provided that no changes have been made to your cover. Neither level or stepped premiums are guaranteed to remain the same. They do and can increase. You should always read your policy’s PDS for further detail.

          Look out for automatic CPI/inflation increases — Some policies apply an automatic annual consumer price index (CPI) increase, typically in line with inflation. This means your cover — and your premium — will increase every year. Premium amounts for any increases in cover will be based on age at the date of increase. This is the case for both Stepped and Level Premiums. You have the choice to switch off this CPI increase to save on premiums. However, keep in mind that while this helps you save money, your cover won't keep up with inflation.

          Life stage — Generally, insurance premiums are cheaper when you’re younger.

          Make health improvements
          — Your health plays a significant role in determining your premium costs. By making positive changes to your health, such as quitting smoking or incorporating regular exercise into your routine, you could enjoy lower premiums. Comparing life insurance products with Lifebroker not only gives you great options from some of Australia’s leading insurers, many of the insurers on Lifebroker’s panel offer rewards for healthy living that could translate into premium discounts for you.

          Take advantage of discounts
          — Some insurers offer discounts on premiums if you pay annually, or if you bundle multiple policies together (like a life policy and income protection policy). These discounts can further reduce your insurance costs.

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