How to choose life insurance

Last updated: July 2026

Key takeaways

If you're comparing life insurance options, these are some of the main things to keep in mind:

• Consider whether life insurance aligns with your financial responsibilities and personal circumstances
• Estimate how much cover you may need by considering factors such as your income, debts, ongoing expenses and dependants
• Compare life insurance and other types of cover to understand what each product is designed to do
• Look beyond premiums by reviewing policy inclusions, exclusions, waiting periods and other important terms
• Compare providers based on the information they make available, the support they offer and how their policies align with your needs
• Review key documents, such as the Product Disclosure Statement (PDS), Financial Services Guide (FSG) and Target Market Determination (TMD), before applying
• As your circumstances change over time, it can be helpful to review whether your cover continues to meet your needs

Choosing life insurance can feel like a big decision, particularly when there are different cover options, policy features and providers to compare. Understanding what to look for can help you feel more confident as you explore your options.

This guide explains the key factors to consider when choosing life insurance in Australia. You'll learn when people commonly consider taking out cover, how to think about the amount of cover you may need, what policy features to compare, and the questions worth asking before you apply.

If you're exploring your options, Real Life Insurance is one of the providers you can consider. You can also learn more about Real Life Insurance and review the available product information before deciding whether to request a quote.

Step 1: Consider whether life insurance is appropriate for your circumstances

Whether you need life insurance depends on your personal and financial circumstances. While not everyone will decide to take out cover, many Australians consider it when they take on financial responsibilities or want to help protect the people who rely on them financially.

Life insurance is generally designed to provide a lump sum payment if the insured person dies or is diagnosed with a terminal illness. Depending on your circumstances, this payment may help your loved ones manage expenses such as everyday living costs, outstanding debts or future financial commitments.

Learn more: The beginner’s guide to life insurance

When people commonly consider life insurance

There isn't a single "right" time to consider life insurance. Instead, many people review their options when their circumstances change. For example, you might consider learning more about life insurance if you:

• buy your first home or take on a mortgage
• get married or enter a long-term relationship
• start or grow your family
• become the primary income earner for your household
• take on caring responsibilities for dependants
• own a business or have financial obligations that others may need to manage

These life events can change your financial commitments, which may influence the type or amount of cover you decide to explore.

Questions to ask before comparing policies

Before comparing life insurance policies, it can help to think about your own circumstances and what you want your cover to achieve.

You may wish to consider questions such as:

• Who relies on my income or financial support?
• What ongoing expenses or debts would need to be covered if I were no longer here?
• How long would my family or beneficiaries need financial support?
• Do I already have any life insurance through my employer or superannuation fund?
• Have my personal or financial circumstances changed since I last reviewed my cover?

Taking time to answer these questions can make it easier to compare policies and understand which features are most relevant to your circumstances. If you're unsure about your options, consider reviewing the available product information carefully or seeking professional financial advice where appropriate.

Step 2: Work out how much life insurance cover you may need

The amount of life insurance cover you may need will depend on your individual circumstances. There isn't a standard amount that's suitable for everyone, so it's worth considering your current financial commitments and the people who may rely on you financially.

As your circumstances change over time, the amount of cover you choose may also change. Reviewing your cover periodically can help ensure it continues to reflect your needs.

Factors that may influence how much cover you need

When estimating how much life insurance cover you may need, you could consider factors such as:

• your outstanding mortgage and other debts
• your household's ongoing living expenses
• your current income and how it supports your family
• the number and age of your dependants
• future expenses, such as education costs or childcare
• any savings, investments or other financial resources your beneficiaries could access
• any existing life insurance you may already hold, including cover through your superannuation fund

Thinking about these factors can provide a useful starting point before comparing different levels of cover.

Use a life insurance calculator as a starting point

If you're unsure where to begin, a life insurance calculator can help you estimate how much cover you may wish to consider based on your financial situation and responsibilities.

While calculators can provide a helpful estimate, they don't replace reading the relevant policy documents or considering your own circumstances. If you need personalised financial advice, consider speaking with a qualified financial adviser.

Learn more: How much life insurance do I need?

Step 3: Compare life insurance and other types of cover 

When choosing life insurance, it's helpful to understand that different types of insurance are designed for different purposes. Comparing your options can help you understand how each type of cover works and whether it aligns with your financial goals and circumstances.

Some types of cover may be available as standalone policies, while others may be offered as optional benefits or separate insurance products. Availability will depend on the insurer and the product you choose.

Step 4: Compare what policies include

Life insurance policies can vary between providers. Looking beyond the policy name and comparing what's included can help you understand how different products work and whether they align with what you're looking for.

As you compare policies, remember that cover is always subject to the policy terms and conditions.

What to compare

When comparing life insurance policies, consider looking at:

• What the policy covers – Understand the insured events and the circumstances in which a benefit may be payable
• Exclusions and limitations – Check whether there are situations where a benefit won't be paid or where specific conditions apply
• Waiting periods – Some policies or optional benefits may include waiting periods before cover applies or before a benefit can be paid
• Eligibility requirements – Review any age limits, residency requirements or other eligibility criteria
• Benefit amounts – Compare the minimum and maximum cover amounts available and whether they meet your financial needs
• Policy options – Some insurance providers may offer optional benefits or additional cover that can be added to a policy, depending on the product

Taking the time to compare these features can help you make a more informed comparison between policies rather than focusing on one feature alone.

Read the policy documents before you apply

Before choosing a life insurance policy, it's important to understand how the cover works.

The Product Disclosure Statement (PDS) outlines the policy's features, benefits, exclusions and important terms and conditions. You may also find it helpful to review the Target Market Determination (TMD) to understand the class of customers the product is designed for, along with the Financial Services Guide (FSG), which outlines the financial services being provided.

Reading these documents before applying can help you compare policies with greater confidence and understand what questions you may want to ask before making a decision.

Learn more: What does life insurance cover?

Step 5: Understand premiums and policy costs

When comparing life insurance, premiums are an important consideration, but they're only one part of the decision. Understanding how premiums are calculated and what they relate to can help you compare policies more effectively.

The premium you pay can vary between insurers and products, so it's worth considering what the policy includes as well as how much it costs.

What can affect life insurance premiums?

Several factors may influence the premium for a life insurance policy. Depending on the insurer and the product, these may include:

• your age when you apply
• the amount of cover you choose
• your health and medical history
• whether you smoke or use tobacco products
• your occupation or lifestyle
• the type of policy and any optional benefits you select.

Each insurer assesses applications differently, so premiums and eligibility may vary between providers.

Look beyond the premium

While it can be tempting to compare policies based on price alone, it's also important to understand what you're receiving for the premium you pay.

When comparing life insurance policies, consider looking at:

• the level of cover available
• what events the policy covers
• any exclusions, limits or waiting periods
• how premiums may change over time
• the flexibility to adjust your cover if your circumstances change, where available
• the information and support available throughout the application and claims process.

Comparing these factors alongside the premium can provide a more complete picture of how different policies work.

If you're considering applying for life insurance, requesting a personalised quote can help you understand the premium for your circumstances.

Step 6: Compare ways to buy life insurance

There are several ways to buy life insurance in Australia. The option you choose may affect how you apply for cover, the support you receive during the application process and how your policy is managed.

Understanding the differences between each purchase option can help you decide which approach best matches your preferences and circumstances.

Consider the support you may need

Some people prefer to compare and apply for cover themselves, while others value guidance throughout the process. Whichever option you choose, it can help to understand:

• how you'll apply for cover
• what information you'll need to provide
• what support is available if you have questions
• how you'll manage your policy after it starts
• where to find important documents, including the Product Disclosure Statement (PDS).

If you're considering buying life insurance directly, look for clear product information and a straightforward application process. If you have questions while comparing your options, speaking with a customer service specialist may help you better understand the available cover and policy features.

[H2] Step 7: Consider your stage of life

The type and amount of life insurance you choose may change as your circumstances change. Major life events can affect your financial responsibilities, so it's worth checking your cover from time to time to ensure it continues to reflect your needs.

While everyone's situation is different, the examples below highlight some of the factors people commonly consider at different stages of life.

[H3] Young adults

If you're starting your career or becoming financially independent, you may begin thinking about how life insurance could fit into your longer-term financial plans.

You might consider:

• whether anyone relies on your income
• any personal debts or financial commitments
• whether you already have life insurance through your employer or superannuation fund
• how your needs may change as your circumstances evolve

[H3] Parents and growing families

Many people reassess their life insurance after having children or taking on greater financial responsibilities.

Common considerations include:

• helping provide financial support for dependants
• covering mortgage repayments or other significant debts
• helping meet ongoing household expenses
• planning for future costs, such as education or childcare

Learn more: Life insurance for young families

[H3] Established households

As your career progresses or your financial situation changes, it can be helpful to review whether your existing cover still reflects your circumstances.

For example, you may wish to consider:

• changes to your income
• paying down debts
• purchasing additional property
• changes to your family or household
• existing savings or investments

Learn more: Life insurance for established families

[H3] People approaching retirement

As retirement approaches, your financial priorities may change. Some people choose to review their life insurance as mortgages reduce, children become financially independent or retirement plans become clearer.

When reassessing your cover, you may wish to consider:

• whether your financial obligations have changed
• any existing savings or retirement income
• whether your beneficiaries' needs have changed
• the policy terms, including any age limits or conditions that may apply

Learn more: Life insurance for seniors

[H2] Choosing a life insurance provider

Choosing a life insurance provider involves more than comparing premiums. Looking at a range of factors can help you understand how different life insurance providers and policies compare, so you can make an informed decision based on your own circumstances.

As you compare providers, remember that policy features, eligibility requirements and available cover can vary. Reading the relevant product documents can help you understand how each policy works before you apply.

[H2] What to compare between life insurance providers

When comparing life insurance providers, it may be helpful to look at the following:

Learn more about Real Life Insurance

Once you understand what to look for in a life insurance provider, you can compare how different policies align with your needs, budget and preferences.

With Real Life Insurance, you can apply directly and access our customer service team, who can help you understand the available cover.

If you'd like to explore your options further, you can learn more about Real Life Insurance or request a quote to receive information based on your individual circumstances.

Frequently asked questions

How do I choose life insurance?

Choosing life insurance starts with understanding your own circumstances. Consider your financial commitments, whether anyone relies on your income, the amount of cover you may need and the types of policies available. It's also helpful to compare policy features, exclusions, premiums and the information provided by different insurers before making a decision.

How much life insurance cover may I need?

The amount of cover you may need depends on factors such as your income, outstanding debts, ongoing living expenses and financial responsibilities. You can use a life insurance calculator as a starting point.

When should I consider life insurance?

People commonly consider life insurance when their circumstances change, such as buying a home, starting a family, taking on a mortgage or becoming financially responsible for others. There isn't a single right time to apply, so it's worth reviewing your needs as your life changes.

Can I buy life insurance through my superannuation fund?

Some superannuation funds offer life insurance as part of their membership or as an optional benefit. The type and amount of cover available can vary between funds. Before relying on cover held through super, it's important to understand how the policy works, how premiums are paid and whether the cover meets your needs.

What should I look for when comparing life insurance policies?

When comparing life insurance policies, look beyond the premium. It can help to compare the level of cover, policy exclusions, waiting periods, eligibility requirements, benefit amounts and any optional benefits.

How do I choose a beneficiary for life insurance?

Choosing a beneficiary is an important part of taking out life insurance. The options available and the process for nominating a beneficiary can vary depending on the type of policy and how it is owned. Before making a nomination, review the policy information carefully and consider seeking professional advice if you're unsure how beneficiary nominations apply to your circumstances.

Should I review my life insurance over time?

Yes. As your personal or financial circumstances change, it can be helpful to review your life insurance to determine whether your existing cover continues to reflect your needs. Common times to review your policy include after buying a home, starting a family, changing jobs or paying off significant debts.