In short

Premiums generally depend on your age, health, lifestyle, occupation, gender and how much cover you choose.
As a general guide, a healthy 35-year-old non-smoker might pay about $30 to $45 a month (men) or $25 to $40 (women) for $500,000 of life cover.
By age 45, the same cover might cost about $60 to $90 a month (men) or $45 to $75 (women).
Smokers typically pay 50% to 100% more than non-smokers for the same cover.

Life insurance is an essential financial safety net for many Australians, but understanding its cost can be challenging. With various factors influencing premiums and multiple policy types available, finding the right coverage at the right price requires careful consideration.

What Determines Life Insurance Costs in Australia?

The cost of life insurance in Australia varies significantly based on several key factors:

Age and Health Status

Your age and health condition are primary determinants of your premium. Generally, younger and healthier individuals pay lower premiums as they present a lower risk to insurers.

Lifestyle Factors

Smoking, alcohol consumption, and participation in high-risk activities can substantially increase your premiums. For example, smokers typically pay 50-100% more than non-smokers for the same coverage.

Occupation

High-risk occupations such as mining, construction, or emergency services often attract higher premiums due to increased workplace risks.

Coverage Amount and Type

The more coverage you need, the higher your premium will be. Different policy types also come with varying costs.

Gender

Statistically, women tend to live longer than men, which can result in slightly lower premiums for female applicants.

Average Life Insurance Costs in Australia

While individual circumstances vary greatly, here’s a general overview of what Australians might expect to pay:

For a healthy 35-year-old non-smoker seeking $500,000 of life cover:

Men might pay approximately $30-$45 per month
Women might pay approximately $25-$40 per month

These figures increase with age.

By age 45, the same coverage might cost:

Men approximately $60-$90 per month
Women approximately $45-$75 per month

Types of Life Insurance and Their Costs

Different insurance types protect against various risks, each with its own pricing structure:

Term Life Insurance

The most straightforward option, providing a lump sum payment upon death or terminal illness diagnosis. It’s typically the most affordable type of life insurance.

Total and Permanent Disability (TPD) Insurance

Covers you if you become permanently disabled and unable to work. TPD can be purchased as a standalone policy or as an add-on to term life insurance. It generally costs more than basic life cover due to the higher likelihood of claims.

Trauma Insurance

Provides a lump sum payment if you’re diagnosed with a specified serious illness such as cancer, heart attack, or stroke. This coverage is usually more expensive than term life insurance due to the higher probability of claims.

Income Protection Insurance

Replaces part of your income if you’re unable to work due to illness or injury. Premiums vary based on your income, waiting period, and benefit period, but typically range from 1-3% of your annual income.

Ways to Reduce Your Life Insurance Costs

There are several strategies to make life insurance more affordable:

Purchase Early

Securing coverage when you’re younger and healthier can lock in lower premiums.

Maintain a Healthy Lifestyle

Non-smokers with healthy BMIs and no chronic health conditions qualify for lower rates.

Choose Level Premiums

While initially more expensive than stepped premiums, level premiums remain consistent over time and can save money in the long run.

Review and Compare Regularly

The insurance market is competitive. Reviewing your coverage every few years can help identify better-value options.

Consider Insurance Through Superannuation

Many Australians access life insurance through their super funds, which can be cost-effective as premiums are deducted from their super balance rather than their take-home pay.

The Value of Professional Advice

While online calculators and direct insurers offer quick quotes, working with a specialist insurance broker often provides better value. At Absolute Insurance, we:

Compare policies across multiple insurers to find the best coverage for your specific situation
Ensure you’re not over-insured or under-insured
Identify discounts and special offers you might not find on your own
Provide ongoing support, especially at claim time when it matters most

Making the Right Choice for Your Situation

The right life insurance policy balances adequate protection with affordable premiums. Rather than focusing solely on finding the cheapest option, consider what coverage truly meets your family’s needs.

Ask yourself:

What financial obligations would your family face without your income?
How long would they need financial support?
What assets could they liquidate if necessary?

Your answers will help determine the appropriate coverage amount and type for your situation.

At Absolute Insurance, we specialise in finding personalised insurance solutions that provide the right coverage at competitive rates. Contact us today for a consultation to discuss your life insurance needs and discover options that fit your budget and circumstances.

Related posts:

Reviewed by Greg Maguire

Greg Maguire reviewed this article to make sure the information is accurate and reflects current insurance practice. It is general advice only and does not take your personal circumstances into account.

Greg Maguire is an Authorised Representative (No. 255354) of AD Advisory Services Pty Ltd, ABN 68 005 830 802, AFSL 237058.

Greg Maguire

Principal

Greg Maguire is the founder and principal of Absolute Insurance, a family-run Perth life insurance broker he runs with his wife Steph. Greg has spent more than 20 years helping Western Australian families and business owners protect what matters most, with life insurance, income protection, TPD and trauma cover from Australia's leading insurers.

Before insurance, Greg was a primary school teacher, and that same patient, one-to-one approach is how he still works today. He takes the time to understand your situation, explains your options in plain English, and stands beside you and your family if you ever need to claim.

Greg holds an Advanced Diploma of Financial Planning from Deakin University and a bachelor's degree from Edith Cowan University. He is an active member of the local community through the Chamber of Commerce and Industry WA and Baldivis Rotary.

Greg Maguire is an Authorised Representative (No. 255354) of AD Advisory Services Pty Ltd, ABN 68 005 830 802, AFSL 237058.

After putting it off for years, my wife and I finally bit the bullet and had Greg assist us in renewing our insurance policy’s. In doing so Greg worked professionally and diligently to find us the best policy. We would both strongly recommend his services.

Nick Ursulic

Greg was amazing to work with and really helped me receive the insurance I wanted for my financial protection when no others were able too. Absolutely fantastic!

Natasha Maitland

Greg has been absolutely amazing with his level of service provided to us for our life insurance and income protection needs. Nothing was too much trouble for him. Great communication skills, knew exactly what we were hoping to achieve and did everything in a very timely manner and made the service to us very personal. He listens and delivers what he promises. Truly grateful for his time and highly recommend his services.

Scott Rountree

Very happy with the service Greg Maguire at Absolute Insurance has provided. He took the time to understand our situation properly and worked hard to find cover that suited our needs and budget. His understanding of FIFO and mining-related roles made a real difference. Clear communication, responsive service and practical advice throughout. Happy to recommend.

Robert Keilar

Super happy with the insurances Greg set up for us and love supporting local businesses

Samantha P

I would absolutely recommend Greg’s services. Before working with him, I had a difficult time obtaining insurance due to complexities in my medical history. Greg guided me through the process from start to finish, acting as a liaison with the underwriters and helping ensure the necessary information and evidence were provided. Nothing ever seemed too complicated or too much trouble for him. I really appreciated his advice, persistence, and willingness to advocate on my behalf with the insurers. Thanks to his support, I was able to secure several policies with some exclusions but no premium loading, which was a much better outcome than I had expected. Thank you, Greg!

Jessica Scholle

Greg has helped us with our insurances for many years. Over that time he has always taken incredible care to ensure that he is suggesting really sensible and considerate options for our needs. Insurance is complicated, but Greg makes it so much easier.

Val Smith

My parents, my partner and I have been with Absolute Insurance for well over 20 years. Greg has been amazing and would highly recommend him to anyone that needs a trusted advisor.

Gregory Allen

We have had Greg’s support and guidance managing our Life Insurance Policies over many years. He has always sought the best options for us and has provided sound advice as our circumstances charged over time. We have always appreciated his flexibility and efficiency. It has been a pleasure doing business with him.

Philip O'Connor

From the start to the finish, Greg was a pleasure to deal with, very professional and most importantly found me and my family the best insurance cover to suit our needs, very happy with the service provided.

Craig

How Much Is Life Insurance Australia