Home / Blog / How much does life insurance cost?

How much does life insurance cost?

December 8, 2023 | Insurance

If you want to ensure that your loved ones are financially protected in the event something unexpected happens to you, purchasing the right type of life insurance is an important step to take.

However, before signing up for an insurance policy, it’s important to understand that many factors determine how much life insurance costs and that some of these depend on your unique circumstances. Factors such as your age, health, occupation, lifestyle, and the amount of coverage you need will affect the premiums you pay.

In this article, we’ll take a closer look at these factors and explore strategies to help reduce your life insurance premiums.

Factors Affecting the Cost of Life Insurance

Insurance providers use various criteria to determine how much their clients will pay in premiums. Generally, if you are considered a higher risk, the higher your premiums would be.

factors affecting the cost of life insurance

The cost of life insurance can vary based on several factors, such as:


Life insurance providers would assess your health as part of the underwriting process. If you have pre-existing medical conditions, such as heart disease or high blood pressure, or engage in unhealthy habits such as smoking or excessive drinking, you may have to pay higher premiums, as you would be considered a higher risk for life insurance providers.


Certain lifestyle choices and engaging in high-risk activities can affect the cost of life insurance. If you participate in extreme sports or dangerous hobbies like skydiving or bungee jumping, you may be charged higher premiums for coverage.


If you work in a high-risk occupation such as mining, construction, piloting or firefighting, you may have to pay higher premiums for life insurance. If your occupation puts you at a higher risk of accidents or illnesses that could lead to premature death, insurance companies will take this into account when determining premiums.

Age & Gender

Premiums can increase as you age, and women typically have lower premiums than men. This is because women generally have a longer life expectancy and are considered a lower risk for life insurance providers.

Medical Condition & History

Any medical conditions or family history of illness that you may have can also affect the cost of life insurance. If you have a history of cancer or heart disease in your family, for example, you may have to pay more for coverage. Similarly, if you have a chronic medical condition, such as diabetes, you may also have to pay higher premiums.

Coverage Amount

The higher the coverage amount, the higher the premium. This is because the life insurance provider will have to pay out more if you were to make a claim. It’s important to strike a balance between the coverage amount and the affordability of the premiums to ensure that you are adequately covered without overpaying.

Average Cost of Life Insurance 

In 2015-2016, the average weekly spending by Australians on superannuation and life insurance was $77, according to the Australian Bureau of Statistics. Of the life insurance cover, 70% was held in superannuation funds, which included life cover, income protection, and disability benefits.

Average Weekly Spending on Super and Life Insurance

However, it’s worth noting that the cost of life insurance in Australia is not a fixed figure and the average cost can be difficult to pinpoint. It can vary based on multiple factors already listed in the previous section. The policy type, the benefits and the insurance company also impact the cost.

To determine the cost of a life insurance policy tailored to your unique needs and circumstances, it’s best to consult with a financial adviser specialising in insurance to find the best deal available.

What’s the right cover amount for me? 

To find out the right life insurance cover amount for you, you would have to take into account factors such as your income, dependents, assets and expenses. A financial adviser can help you to calculate a recommended amount based on the information you provide.


The amount of coverage should be enough to replace your income. If you are the primary breadwinner in your family, you will want to ensure that your life insurance policy provides enough coverage to replace your income and maintain your family’s standard of living. Consider the amount of money that your family would need every month to cover expenses like mortgage or rent, utilities, food, and other living expenses.


Consider how much money your dependents would need to maintain their lifestyle if you were to pass away. This includes expenses like education, childcare, and medical bills. If you have young children, you will want to ensure that your life insurance policy provides enough coverage to support them until they are old enough to support themselves.


Consider any assets that could be sold to provide for your family. This includes savings accounts, investments, motor vehicles, and any property that you own. If you have a significant amount of assets, you may not need as much life insurance coverage as someone who has fewer assets.


Consider any expenses that would need to be covered, such as funeral costs or outstanding debts. You may want to ensure that your life insurance policy provides enough coverage to pay for these expenses so that your family does not have to worry about them during an already difficult time.

How Can I Lower My Premiums? 

Here are some tips to lower the amount you pay for your insurance premiums:

1. Shop around and compare policies: Be sure to carefully read a policy’s product disclosure statement (PDS) before purchasing insurance. It would be wise to first compare policies from different insurers to find the best coverage for you at the most affordable price. You may use online comparison tools, or seek advice from an insurance specialist.

2. Change your payment frequency: Depending on your policy, you could save more on your premiums if you change your payment frequency. For example, life insurance might cost less if you pay your insurance premium annually, and might make sense if you can afford it. On the opposite end, more frequent monthly payments spread out for a longer term may be more expensive in the long run but may be more affordable for you at present. In any case, speak to your insurer to work out the best payment plan for you.

3. Bundle policies: Some insurance providers would offer discounts when you bundle multiple policies together, including life, total and permanent disability, trauma and income protection insurance, so it might be worth asking your provider about this option.

4. Consolidate your super funds: If you have multiple super funds, consolidating them into one account can reduce the number of premiums you pay, as many super funds automatically provide insurance benefits. It would be ideal to choose the fund that provides the best overall insurance coverage for your needs. It’s vital to carefully assess your situation and ensure that you don’t cancel any necessary insurance cover when you close a super account or forgo cover with more beneficial terms (for example, cover that is free of policy loadings or exclusions). Before making such a big decision, it’s best to seek professional advice from an expert.

5. Review your coverage: Similar to the previous tip, ensure you’re not over-insured and only pay for the coverage you need to avoid unnecessary expenses. Some types of insurance are needed only by some types of people. For example, you may not need life cover if you don’t have dependents or debt obligations but would need income protection because you rely on your salary to fund your lifestyle.

6. Maintain good health: Living a healthy lifestyle and avoiding risky behaviours such as smoking can result in lower life insurance premiums. It would be in your best interest to maintain a healthy and active lifestyle. You may have to pay more for life insurance if you have a pre-existing medical condition or a family history of illnesses. Remember, insurers take into account your age, lifestyle, and health to calculate your premiums.

Protect Yourself and Your Loved Ones with Coastal Advice Group

Life insurance is an important investment to ensure the financial security of your loved ones in the face of unexpected events. By understanding the factors that impact life insurance costs, you can make informed decisions when choosing the best policy and coverage amount for your needs. Seeking the advice of a financial adviser who specialises in insurance can make it easier for you to find the most cost-effective option.

Remember that you can also take steps to lower your premiums. Keep in mind as well that the terms and conditions vary across insurance products and insurers, so it’s good practice to always read the fine print.

If you are looking for specialist insurance advice from a professional financial adviser, Coastal Advice Group is here to help you. We have offices in Newcastle, the Central CoastSydneyPort Macquarie, and Byron BayCall us or book online to secure your first appointment with us today and get started!



Related Articles

January 12, 2024 |

Understanding Term Life Insurance

Posted by Coastal Advice Group
March 11, 2024 |

Income Protection Insurance: Do You Really Need It?

Posted by Coastal Advice Group