Best Life Insurance Providers In 2023

Have you ever wondered what might happen to your family, financially, if you were to pass away unexpectedly? It’s not an enjoyable thought, but it is a necessary one–and it’s why life insurance exists.

In Australia, only 15 million people are actively insured with some sort of life insurance cover–and many of those are actually underinsured, a report for the Financial Services Council notes.

The report states that while most Australians have some level of risk cover, usually through their superannuation fund, there are often “significant gaps in coverage and benefits”.

So, for those looking to take out a dedicated life insurance policy–also known as death cover–in order to protect their loved ones financially in the event of your own passing, here are some of the best providers currently in the market.

It’s worth noting that the below list isn’t intended to be a stand-alone assessment of every provider in the marketplace—nor does it suggest that life insurance policies are suitable to everyone. But it will provide a starting point for further research for those looking to take out this form of insurance.

  • Best Life Insurance Providers
  • TAL Accelerated Protection
  • ClearView Life Cover: Clear Choice
  • OnePath: OneCare Life Cover
  • Budget Insurance: Premium Life Direct
  • Resolution Life: Elevate
  • NobleOak: Premium Life Direct
  • Allianz: Life Cover
What is Life Insurance?
Life insurance is a type of insurance policy that provides a payout to your family if you pass away. It is also referred to as death cover, as the insurance covers death by any cause–although suicide is usually excluded for a set period of time.

Most life insurance policies will pay out your family if your death is related to an event such as an accident; medical complications; natural causes; acts of violence; or terminal illnesses. When it comes to terminal illness, you may be able to access your benefit amount if a doctor believes you will pass away in the near future.

As with any type of insurance, life insurance policies all come with their own specific conditions, exclusions and limits. It’s imperative that you read the Product Disclosure Statement (PDS) to ensure you understand what you are and aren’t covered for—and if life insurance is right for you.

What is Covered
If you have a death cover policy, a lump sum amount of money will be paid out when you die. This money is paid to those that you nominate as your beneficiaries on the policy, often being your spouse, children and loved ones.

If you haven’t named a beneficiary on your policy, your estate decides where the money goes upon your death. You can read more about estate planning in our comprehensive guide.

Life cover may also include terminal illness cover, meaning a lump sum would be paid to you if you’re diagnosed with a terminal illness with limited life expectancy. Additionally, some providers allow you to add Total and Permanent Disability Insurance to the plan (usually at an additional premium).

Life Insurance Benefits
Along with a pay-out to your family upon death or a terminal illness diagnosis, life cover can also include many additional benefits depending on the policy and provider that you choose. These possible inclusions and benefits are explained below:

Advanced Payment Benefit 

It can take a couple of months for a life insurance claim to be assessed, so the advanced payment benefit enables the insurer to pay-out a certain amount up front to your family when you die. A high amount for an advanced payment benefit is between $20,000 and $25,000, but the figure changes depending on your provider.

Regardless of the amount, the payment is designed to help your family meet immediate costs and expenses such as financial expenses and legal fees while the life insurance claim is being assessed.

Sometimes this payment is known as an advanced funeral payment or funeral cover, and if so, is a pay-out specifically designated to help your family cover funeral costs, which can be expensive.

Repatriation Benefit

A repatriation benefit is when the life insurance policy provides financial assistance for the repatriation of the policyholder’s body if they pass away while traveling outside of their home country.

This is often an inclusion of comprehensive travel insurance policies, but having it included in your death cover means your family will have financial help in the event that you have not taken out travel insurance, or it’s not included.

Inflation or Indexation Benefit

Australians have become more and more aware of the effects of inflation in the past 12 months. Luckily, some life insurance providers offer a benefit that helps protect policyholders from the cost of living.

To do so, the sum insured is usually automatically increased on each policy anniversary in line with CPI. Some insurers have a maximum increase per year, such as 5%.

Financial Planning Benefit

A financial planning benefit inclusion within a life insurance policy provides the person insured or their immediate family member the costs associated with a financial advisor. There is usually a maximum amount per year or per consultation.

Grief Counselling Benefit

Your death or diagnosis with a terminal illness can be an emotional and overwhelming time for you and your loved ones, which is why many life insurance providers offer a grief counselling benefit. This is where professional grief counselling sessions are reimbursed, up to a certain number of sessions or total cost.

Future Insurability Benefit

The future insurability benefit allows the insured to increase their cover by a certain amount each year if they choose to (up to a certain amount, percent or age), usually without needing to provide any further evidence of health or insurability.

Premium Pause Benefit

Some providers offer their policyholders the option to pause their policy, usually for a maximum of up to 12 months. In doing so, policyholders will not be required to pay their premium in that time, and it will not be treated as a reinstatement or increase of cover once the premium pause period concludes.

Usually the insurance provider will only offer a pause once your cover has been in place for a certain number of years, and will not pay any claim arising from an event that occurs during the pause period and possibly not within a certain period of time of restarting your payments either.

Child’s Critical Illness Benefit

When given the option to add child’s critical illness to your life insurance policy, it means you can receive a benefit should your children suffer a critical illness. The insurance provider will specify which events classify as a critical illness, with the benefit paid to a certain amount and for children of a certain age.

What life insurance won’t cover is entirely dependent on the policy and provider that you choose. However, there are some general exclusions that are commonly found across the industry.

Most commonly is the exclusion of death by intentional or deliberate self-inflicted events–meaning suicide–for a certain amount of months after taking out the policy, or after any changes are made to the policy. Often, the period that suicide is excluded for is 13 months.

Depending on what your death cover includes, such as if it has Total and Permanent Disability Insurance or Trauma Benefits, there may be additional exclusions relating specifically to these.

There are also maximum age limits to keep in mind when looking for life insurance. This includes the maximum age that a provider will offer new coverage to, as well as the maximum age they will cover you until once you have taken out a policy.

Purchasing Life Insurance
In Australia, there are multiple different ways you can invest in life insurance. This includes through a superannuation fund, which often has a default life insurance offering available to consumers. This is the death cover most Australians have, rather than a more comprehensive, dedicated policy.

Individuals can however purchase more thorough life insurance through their super fund if they choose to, or through a financial advisor. In fact, some insurance policies are only able to be purchased via an advisor.

Keep in mind that many insurance companies do sell policies directly to the consumer, meaning you can purchase it yourself. For the purposes of this list, Forbes Advisor only analysed policies sold directly to the consumer from the insurer.

Our Methodology
Forbes Advisor performed an in-depth assessment of the death cover options currently available on the Australian market. Other forms of life insurance, such as income protection insurance or death and permanent disability were not analysed individually. However, we did note whether these were available to add to the death cover plans.

Nearly 20 different providers were analysed, with a range of different variables considered to allow for an overall ranking. These variables were:

Whether the consumer could purchase the death cover directly from the provider, or if it could only be purchased through a super fund or financial advisor;
If the provider offered guaranteed acceptance, meaning the policyholder would be approved without having to undergo a medical exam;
What the maximum death benefit available is;
If the life insurance policy is fully underwritten,
Whether or not the policyholder can choose their level of coverage;
Whether or not the policyholder has a choice between stepped or level premiums, or if there is only one option;
The maximum age that the insurance is available for, including when you can take out a new policy and when cover would cease for pre-existing policies;
If there are any exclusions to the policy and the conditions of such;
Whether or not terminal illness is covered within the policy;
How long the average pay-out time–being how long it has taken, on average, for the insurer to either approve or deny claims;
What the claims accepted rate is of the provider, as the current industry average is 92.4%;
The average amount of disputes per 100,000 lives insured;
If an advanced payment benefit is paid out while your claim is being assessed;
If you can add children to the policy, often known as the child’s critical illness benefit;
If there are other benefits offered, such as a repatriation benefit or inflation benefit;
Whether or not there is an option to add TPD insurance to the death cover policy;
Any discounts or rewards available; and
The details of any SIS disclaimers, if there is one.
The data on the average pay-out time, what the claims-accepted rate is of the provider, alongside the number of complaints, was gathered from MoneySmart’s Life Insurance comparison tool and compared against the publicly available industry average. The data covers January 1 2022 to December 31 2022, while the remainder of the data was gathered from each individual policy disclosure statement.

After considering these parameters, each life insurance provider was then ranked out of 5 stars. The top eight choices of all policies considered and analysed have been included above.

While the price of the monthly premiums will no doubt be an important factor in whether you choose to take out life insurance—and which policy you choose—we did not include price as a metric as it is highly dependent on individual circumstances and is likely to vary from one person to the next.

Life Insurance Disclaimers
As with any insurance policy you purchase, it’s necessary that you carefully read the PDS to ensure you understand any exclusions and disclaimers that may affect your ability to claim, and your family’s ability to receive the claim payments.

A common disclaimer relates to when death cover is purchased through a superannuation fund, due to the Superannuation Industry (Supervision) Act 1993–known as SIS.

This is because under SIS regulations, life insurance under superannuation doesn’t permit certain benefits to be paid. That means if cover is held by a self-managed super fund or within an approved superannuation fund, there are benefits that an insurer will not be able to pay.

When you take out a life insurance policy directly as a consumer, and not through a superfund, the SIS regulation does not apply.

All of the death cover options listed above can be purchased directly from the provider.

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