Life Insurance can be a practical consideration for many Australians, providing some financial support for loved ones in the event of a loss. Understanding the costs involved is so important for effective end-of-life financial planning. We’re here to explore how much Life Insurance typically costs in Australia and what factors might impact your premiums.
Determining the Cost of Life Insurance
The cost of Life Insurance can vary significantly based on a range of factors. These include your age, health status, the level of cover you choose, and other personal details. On average, premiums are higher the older you are or if you have any health conditions, but there are different strategies you can consider to help keep costs affordable.
Factors That Influence Premiums
There are a number of important things to consider when determining how much to pay for your policy:
Age at Application
Age plays an important role in determining your premiums. Generally speaking, the younger you are when you apply, the lower your premiums will be to begin with. This is because insurers see younger applicants as lower risk. However, as you get older, Life Insurance premiums will generally increase. It may even become harder to get cover at all, so it may be better to look at getting cover sooner rather than later. This is also why it’s important to consider providers that can help provide cover wherever you are in your life.
Benefit Amount
The level of cover you select will affect the cost of premiums you pay for your policy. Aside from age, this is one of the most significant factors in determining how much you will pay for your policy. That’s why you should look towards finding cover that may help provide adequate financial support for your loved ones without overextending your budget.
Health Status
Your health can play an important role in the cost of your Life Insurance premiums. When insurers assess your health, they are evaluating the risk they take on when offering you cover. This means that if you’re healthy, with no serious medical conditions, you're seen as less risky, which typically means you pay less on your premium. However, if you have pre-existing health issues or a history of chronic illness, you may pay more on your premium to offset the higher risk to the insurer. Maintaining a healthy lifestyle and managing any existing health conditions can help reduce your premiums.
Gender
Your gender will impact premiums, with women often paying lower rates due to longer life expectancy.
Smoking Status
Smokers generally have higher premiums than non-smokers due to the increased health risks associated with smoking.
Inflation Protection
With costs-of-living increasing over time, it can be helpful to find cover that will adjust your benefit amount each year. This will result in higher premiums paid each year also, but it may help your policy maintain its real value over time. With Golden Life Insurance you have the option of a 3% Automatic Benefit Amount Increase feature, which is applied once a year on the policy anniversary to help your policy to keep up with rising living costs. You can opt out of this feature at any time.
Optional protection – add-ons/riders
Adding additional extras such as critical illness to your insurance policy can affect your Life Insurance premium. While this extra cover enhances the breadth of your cover, it typically results in higher premiums.
How much cover should I take out?
When determining the right amount of Life Insurance cover to take out, several factors should be considered. Again, it should be noted that your age may determine the maximum amount of cover you can take out at the time of taking out the policy.
To determine what level of cover you need, firstly, think about your family's financial needs and how much support you'd like to provide. Take funeral costs into account and what you may want to leave for your family’s living expenses. Consider your existing savings and assets that could contribute to these expenses. You should also consider inflation, as living costs tend to rise over time. The Life Insurance cover you take out today may only take your family so far when the time comes. Lastly, your budget and premium affordability should guide your decision. Striking a balance between adequate cover and affordability is always important.
How do I reduce the cost?
Reducing the cost of Life Insurance can be achieved through various strategies, including:
Choosing a Lower Benefit Amount
Opting for a cover amount that aligns with your actual day-to-day expenses, as higher cover leads to higher premiums.
Age Consideration
Purchasing a policy at a younger age can result in lower initial premiums, as you are considered lower risk.
Reviewing and Adjusting Cover
Periodically assess your cover needs and adjust your policy accordingly to avoid overpaying.
Make your golden years shine with Golden Life Insurance
Finding the right Life Insurance policy is all about balancing affordability with the peace of mind that your loved ones will be financially supported when the time comes.
If you’re an Australian resident aged 40-80, you can apply for a Golden Life Insurance policy with no medical exams or blood tests required. There are no complicated forms to fill in; simply answer a few health and lifestyle questions and you’re all set.
If you’re interested in helping give your loved ones a brighter a tomorrow, simply give our Australian-based team of Life Insurance specialists a call. Whether you want to get your cover in place, or if you simply have questions, we’d be delighted to help. Just give us a call on 1800 960 917 and you can arrange everything over the phone in minutes.