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How to Find the Best Life Insurance Policy for You
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How to Find the Best Life Insurance Policy for You

Katie Douglass

Katie Douglass

26/03/2021 • 9 minute read

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Life insurance is important, as it provides you and your family with a financial safety net if you pass away or are diagnosed with a serious illness or injury. It means that you and your loved ones will be given peace of mind knowing there is financial security if the unexpected happens. This is why finding the best life insurance policy for you is not a decision to be made lightly. 

But first, a quick rundown of what life insurance is. Simply put, life insurance is a type of insurance that pays a lump sum of money to you or your loved ones if you pass away or are diagnosed with a serious illness or disability. This money can be used to help cover everything from mortgage and debt repayments to living expenses and lost income.

Because life insurance is uniquely tailored to each person’s circumstances, finding the best policy can be a lengthy process and, let’s face it, downright confusing! To help you out, we’ve compiled a guide on how to find the best life insurance policy for you. 

What to consider when buying life insurance

Unfortunately, there’s no ‘one-size-fits-all’ when it comes to finding the best life insurance policy. However, there’s a few steps you can take and questions to ask yourself to help determine the right policy for you and your loved ones.  

First off, figure out how much money you’ll need in your life insurance policy. According to research firm Rice Warner, it is suggested that the amount of life insurance you’ll need is at least ten times your annual earnings. Here are some key factors to consider how much money you may need to keep you or your loved ones financially secure: 

  • Do you have a mortgage, loans, or rent to pay? 
  • How much money would be left to pay these expenses in the event of your death? 
  • Do you have any other expenses, such as child care or education fees, that your family wouldn’t be able to pay if you pass away? 
  • Do you have money from your superannuation, savings, and shares that you or your family could access? 
  • How much paid annual leave do you have? 
  • Would your immediate or extended family be able to provide support for you if you suffer a serious illness or disability?
  • Would they be financially safe in the event of your death? 

After you work out how much money you might need in your life insurance policy, compare the policies on offer and what features they include and don’t include. To help make it easy for you, we’ve listed what to keep an eye out for in your policy.

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Research firm, Rice Warner, found the amount of life insurance you will need is at least ten times your annual earnings

Type of life insurance cover

An important factor to consider when hunting down the best life insurance policy is the type of cover you want. There are four main types of life insurance life cover, total and permanent disability insurance, trauma insurance, and income protection insurance. Some insurance companies allow you to include multiple covers in one policy but this may increase the cost. Here’s a quick overview of what each type entails: 

1. Life cover 

Life cover, also known as term life insurance or death cover, provides a lump sum payment to your nominated beneficiary or beneficiaries in the event of your death or if you are diagnosed with a terminal illness. This type is usually more suitable for those who have loved ones that rely on them financially such as a spouse and/or children. 

2. Total and permanent disability insurance

Total and permanent disability (TPD) insurance provides a lump sum payment if you are diagnosed with a permanent disability that prevents you from working. Usually there are two types of TPD insurance. One of the types will cover you if you are no longer able to work in your own occupation while the other type, usually cheaper, will provide a lump sum payment if you can’t work in any occupation. 

3. Trauma insurance

Trauma insurance, or critical illness cover, provides a lump sum payment to help cover costs in the event of a serious illness or injury. The payment can help out with rehabilitation and medical expenses as well as replace lost income. Trauma insurance generally covers cancer, heart attack, and stroke but check first with your provider what particular illnesses are covered under their policy. This type of cover provides peace of mind to you and your loved ones in the event of a serious medical crisis and ensures recovery is the main focus. 

4. Income protection insurance

If you can’t work due to a serious illness or injury, income protection insurance provides regular monthly instalments to help cover expenses and replace a portion of your income.

Level of cover

Generally, most life insurance policies can have a maximum level of cover, usually around $1,000,000. Make sure to check how much your insurer can pay out if you or your family make a claim and determine whether it will be enough. 

Inclusions and exclusions

Find out what events or illnesses is or isn’t included in your policy and consider how likely it will affect you or your family’s ability to make a claim. Some policies cover accidental death only, so make sure to check if yours covers death from illness. Plus, suicide is usually not covered for the first thirteen months. 

Types of premiums

When comparing policies, check if your premiums will stay the same or increase as you get older. There are two types of premiums stepped and level premiums. Stepped premiums increase as you age, while level premiums are usually more expensive at the start but remain relatively at the same cost as you get older. Choosing the right type of premiums for you is dependent on your age, how long you want the cover for and whether you’ll need to change it in the future. 

Medical history

Do you have any medical conditions that may not be included? If you have a pre-existing condition it may increase the cost of your life insurance quote. Also, find out if you can increase your cover in the future without undergoing a health check or blood test. 


Most insurance companies have a minimum and maximum age for when you can sign up for life insurance. The maximum entry age is usually under the age of sixty. 


Before you shop around for a life insurance policy, check that you don’t already have default cover through your superannuation. One of the advantages of opting for life insurance through your super is that it is generally cheaper but there are some downsides. First off, the level of cover is usually quite low, however you can look into whether you can insure for a higher amount. Plus, it’s important to note the insurance payout can go to the super fund trustee, not your estate. If you want to choose who your payout goes to, you’ll need to lodge a binding nomination with your super fund. 

Don’t forget! Signing up for life insurance is a decision that takes time and care and it’s not something to rush. Before signing a contract, you should always read the product disclosure statement (PDS) of the life insurance policy you’re looking at. 

How much does life insurance cost in Australia?

There are many life insurance policies on offer in Australia which might make it feel overwhelming to sort through and find the best one for you. Generally, the biggest concern with comparing policies is how much your life insurance will cost.

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What factors will insurers take into account when calculating your cost?

  • Occupation - Do you have a high-risk job?
  • Gender - Some insurers might provide different quotes based on gender
  • Lifestyle - Do you drink or smoke?
  • Medical history - Do you have any pre-existing medical conditions or family medical history that may affect your policy? Are you fit and healthy?

While cost is a big one, make sure to check what other features are included in the life insurance policy and whether it suits you and your family’s situation and financial needs.

Popular life insurance policies 

Please note, the information shown in the following table reflects the current rates offered by Australian financial providers. Products are ranked by their maximum cover level as of August 2020. Ensure you check upfront with your insurance provider to further understand if their product meets your needs. 

Company Age Maximum Cover Level Type of Premiums Medical and/or blood test required Other Features
NobleOak 16 – 69 $15,000,000 Stepped If you are older or applying for higher levels of cover Terminal illness benefit

TPD, trauma insurance, and income protection insurance add ons

Increase cover up to $100,000 

TAL 18 – 74 $2,000,000 Stepped or level TPD and income protection insurance add ons
Insure Me Now 18 – 64 $1,500,000  Stepped Terminal illness benefit

TPD and trauma insurance add ons

NRMA 18 – 65 $1,500,000 Stepped Income protection add on
Allianz 16 – 65 $1,500,000 Stepped Terminal illness benefit

TPD and trauma insurance add ons

Real Insurance 18 – 64 $1,000,000 Stepped TPD insurance add on
NIB 18 – 65 $1,000,000 Stepped Terminal illness benefit
AAMI 18 – 60 $1,000,000 Stepped Terminal illness benefit

Increase cover up to $100,000

Suncorp 18 – 60 $1,000,000 Stepped Terminal illness benefit

Increase cover 

*Rates are subject to change over time. 


Still have questions?

If you want to know more about life insurance, check out our range of articles and guides for more tips:

Life Insurance


*The information about life insurance provided on this page is general knowledge only. It does not consider your financial situation or needs and is not intended as advice. You should always carefully consider the relevant Product Disclosure Statement before making a decision concerning an insurance product. Please see our Terms of Use on this site for more details.

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Katie Douglass

Written by Katie Douglass

Katie Douglass is the Communications Manager at Oiyo and a writer. In recent years, Katie's work has appeared in publications such as Marie Claire, InStyle, and THE ICONIC. She has a Bachelor of Creative Industries in Fashion Communication & Journalism from the Queensland University of Technology. At Oiyo, Katie is responsible for overseeing editorial strategy.

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