What is the Real Cost of Life Insurance?

Have you avoided adding life insurance to your to-do list? Many Aussies are in the same boat and put off buying life insurance because they think it’s too expensive, but in reality, life insurance can be much more affordable than most people realise.

When you think about it, protecting the financial security of your family should be a priority for everyone. And when you consider the actual cost of life insurance, you will soon realise that it’s not as out of reach as you may think.


How Much Does Life Insurance Cost?

To give you an idea of how much life insurance will cost, we have entered some basic information into the get a quote section of our website to provide you with the cheapest premiums currently available for different demographics.

Our results have shown that life insurance can be obtained for as little as $23 per month which is an outstanding price to pay when compared to other living expenses.

We’ve summed up the lowest amount you are likely to pay for life insurance in the table below:

Life Insurance Cost table

*Please note that all quoted premiums are stepped and subject to underwriting

Doesn’t look so bad, does it?

Please keep in mind however that there are a number of different factors that affect the premium you will have to pay, but in general, this is a pretty good benchmark to go by. All premiums are also stepped and subject to underwriting.

Now let's compare this with other typical expenses you are likely to pay in your day-to-day life. You may be surprised to find how many everyday tasks end up costing a lot more than a life insurance policy.


Running and Maintaining Your Car

We all know how expensive it can be to drive and maintain a car. According to statistics obtained from RACQ, the average weekly cost of running a medium sized vehicle is $225.

And then you also have to add on the cost of car registration. Depending on what state you live in and what vehicle you drive, the cost to register your vehicle can range from $200 up to $800 for 3 years.

But the costs don’t stop there. You also need to take into account servicing and repairs, tyres, fuel, parking and any other unexpected expenses that may occur – all in addition to your basic running costs. With every aspect of maintaining and running a vehicle taken into consideration, depending on what car you drive, the annual cost is likely to range from $6,000 to $15,000 per year.


Rent and Mortgage Repayments

The biggest asset and cost that we will ever have in our lives is likely to be our home. Data obtained by ABC from the CBA shows that the average monthly mortgage repayments on a median priced home of $459,000 at an interest rate of 5.18% is $2,458, or about $615 per week.

Even if you’re not paying off a home loan, rent alone is still pricey for many Australians – especially in inner city locations. Property data obtained by shows that the average cost of rent across Australia is $485 per week.


Your Daily Coffee

Australia’s love of coffee can’t be denied, which is why this expense had to be included on our list.

Coffee is a necessity for many people, with one cup costing about $4 a day and an average of 9 cups of coffee being consumed every week, according to Roy Morgan Research. Therefore, Australians on average are spending $36 a week on coffee. Yet despite the cost, it’s often a price that many people are happy to pay.

When considering the price of a simple cup of coffee, life insurance doesn’t seem quite as expensive after all, with life insurance policies available from as little as $5.31 a week!


Other Necessary Living Expenses

There are so many other expenses we have to pay to go about our day-to-day lives. According to the most recent data gained from The Australian Bureau of Statistics (ABS), the weekly spending by Australians on average is:

  • Housing Costs - $223
  • Transport Costs - $193
  • Recreation Costs - $161
  • Furniture and Equipment - $59
  • Clothing and Footwear - $44

Other Additional Costs

But the costs don’t stop there! They keep adding up and it’s no wonder why so many people have such a hard time keeping track of where all that money goes. Here are a few other areas that many of us put money towards every week:

  • Restaurant Meals - $32
  • Mobile Phone - $12
  • Personal Care - $11
  • Animal Expenses - $11
  • Holidays - $52
  • Household Appliances - $13

Comparing these Weekly Expenses with Life Insurance Costs

When comparing all of these living expenses to the cost of life insurance and weighing up the benefits it can provide, its worth can clearly be justified.

So to put this into perspective, let’s look back at the average cost of life insurance and compare this to the cost of our average household living expenses.


Life Insurance Costs

Life Insurance Cost table

*Please note that all quoted premiums are stepped and subject to underwriting


Living Expenses

Living Expenses Table

Once you see these figures side by side, you soon realise that the cost of life insurance – especially for younger, healthier individuals – is very affordable and much cheaper than almost all the other living expenses listed. Even if you’re a middle-aged smoker, the cost of your life insurance policy is still much cheaper than most monthly costs.


How to Fit Life Insurance into Your Budget

Take a look at all of the costs we’ve outlined above and consider this:

Do you spend more or less than the average in any of these areas?

Are there any costs that you could cut back on to make way for life insurance cover?

If you think you would struggle to include life insurance in your budget, your first step is to figure out where you can go without. The best way to identify which living expenses can be reduced is by considering the areas where you spend more than the average Australian.

Whether that means cutting back on meals in restaurants, purchasing household appliances, or reducing personal care expenses, you will be grateful that you made these sacrifices when the time comes for your loved ones to claim on your life insurance policy if something tragic were to occur.


Work out How Much Cover You’ll Need

Now that you better understand the real cost of life insurance, you can get an idea of how much cover you’re likely to need and how much it’ll cost with this life insurance calculator.

Once you know what to expect, you then need to determine the level of cover you need as well as the inclusions and optional extras that you want included in your policy. It’s also always a good idea to gain further advice from a professional and qualified adviser regarding your particular situation.

The Real Cost of Life Insurance

The Real Cost of Life Insurance - An infographic by the team at Cover Australia

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