How much does life insurance cost?

Life insurance can support your family and dependents if you die or are diagnosed with a terminal illness, but you might be worried about the cost. The cost of life insurance is different for everyone and depends on a range of different factors. The good news is your level of life insurance cover can be adjusted to meet what you can afford to pay each week.

How much will my life insurance cost?

Your age, health, gender, occupation and hobbies all play a part in determining the cost. There are also different levels of protection, and the cost varies for those too.

For example, a 35-year-old non-smoking man will pay around $10 a week for $500,000 of life insurance cover. A non-smoking woman the same age will pay about $7 per week for the same amount of cover. These differences reflect different life expectancies between men and women.

Your need for life insurance will change across your lifetime – a 35-year-old with a $1 million mortgage and children will need more cover than a 55-year-old with adult children and a $100,000 mortgage, for example.

Getting life insurance isn’t something you should set and forget; it’s something you should review every few years or when a major life event happens such as having a child, buying a house or getting a promotion. Your MAS adviser can help you adjust your life insurance cover.

What affects the cost of life insurance?

Put bluntly, life insurance premiums are calculated based on the likelihood of you dying. The factors that are taken into account include:

Age: In most cases the younger you are, the cheaper your policy will be.

Health: Being in good health will be reflected in lower premiums. MAS Members can sign up to Āki Wellbeing Hub which provides advice on improving your health, nutrition, mental and financial wellbeing. If you smoke, you can still get life insurance but it will cost you more than a non-smoker.

Occupation: Some jobs are riskier than others. If you work in a job with higher risk of injury or death, your premiums will likely be higher.

Lifestyle and hobbies: Like your occupation, how you live your life can influence your life insurance premiums. A forestry worker that likes to skydive regularly (a risky occupation and hobby) is likely to pay more for their life insurance than an office worker that occasionally plays bowls.

In addition to these factors, a life insurer will also consider the type of policy you’ve applied for and the amount of cover you’ve applied for when calculating your premiums.

Different costs for different cover

Life insurance can be structured in two ways. If you opt for stepped – or 'rate for age' – cover, your premiums will increase as you get older. The other option is to select level cover, where the cost stays the same over the long term, but it'll be more expensive initially than stepped cover. If you’re worried about the cost of life insurance, your level of cover can be adjusted to meet your premium expectations.

Protect your future

MAS’s Future Life Insurance option allows you to add up to 25% of your original cover every three years up until your 55th birthday without any additional underwriting. That means for the extra premium, you’ll be protected from any future health issues that could otherwise increase the cost of your policy or be excluded altogether without this option. Future Life Insurance is perfect for life insurance holders in their 30s or early 40s whose need for life insurance will grow in the coming years.

Find out more about getting life insurance with MAS.

This article provides general information only, and is not intended to constitute financial advice. Before taking out any insurance product, you should carefully consider the terms and specific policy wording. Underwriting criteria will apply.