Tips for paying less on your life insurance premiums

Last updated: July 2026

Key takeaways

• There may be ways to manage your life insurance premiums, depending on your policy, individual circumstances and your insurer's assessment
• Reviewing your cover regularly can help ensure it continues to reflect your current needs and financial situation
• Factors such as your age, health, occupation, lifestyle and the type of cover you hold may influence your premiums
• Reducing your cover may lower your premiums in some circumstances, but it could also leave you with less financial protection if your needs change
• If you're considering making significant changes to your life insurance, it may be helpful to understand the longer-term implications and seek professional advice where appropriate

There may be ways to manage your life insurance premiums, depending on your policy and individual circumstances. However, paying less isn't always the right outcome if it means reducing the level of cover you need.

This guide explains some of the options that may help you manage your premiums, along with important considerations to keep in mind before changing your policy.

How life insurance premiums are calculated

Life insurance premiums are calculated using a range of factors that help insurers assess the level of risk associated with providing cover. The factors considered, and how they're assessed, can vary between insurers and products.

Understanding what influences your premiums can help you review your policy over time and have more informed conversations with your insurer.

Factors that may affect your premiums

Some of the common factors that may influence the cost of your life insurance include:

• Your age: In general, premiums may be higher for older applicants because the likelihood of making a claim can increase with age
• Your health: Your current health, medical history and, where relevant, family medical history may be considered during the application process
• Your lifestyle: Habits such as smoking or participating in certain high-risk activities may affect how your insurer assesses your application
• Your occupation: Some occupations carry a higher level of risk than others, which may be reflected in your premiums
• The type and amount of cover you choose: The level of cover and any optional cover can all influence what you pay
• Your policy terms: Features such as premium structure and other policy options may affect your premiums over the life of your policy

Many of these factors are assessed when you apply for cover, while others may become relevant if you apply to change your policy or ask your insurer to review it. Because every person's circumstances are different, the premium for one policy may not be the same as another, even if the level of cover is similar.

Related reading: If you're unsure whether your current policy still reflects your needs, you can learn more about how much life insurance cover you need before deciding whether to review your cover.

Ways you may be able to manage your life insurance premiums

Before making any changes, it's important to understand how changes to your cover could affect your level of cover and whether it will continue to meet your needs.

Review whether your cover still reflects your circumstances

As life changes, your insurance needs may change too. Reviewing your policy from time to time can help ensure your level of cover still reflects your financial commitments and the people who rely on you.

For example, you may wish to review your cover after major life events such as:

• paying off a mortgage
• welcoming a child
• children becoming financially independent
• getting married or separated
• significant changes to your income or financial responsibilities

While reducing your cover may reduce your life insurance premium in some cases, it's important to consider whether you'll still have an appropriate level of financial protection if a claim is made.

Understand your cover and premium structure

The type of life insurance you have, along with the way your premiums are structured, can influence what you pay over time.

For example, some policies have premiums that change as you get older, while others are designed to remain more consistent throughout the policy term. Different policy structures have different advantages depending on your circumstances, financial goals and how long you expect to keep your cover.

Before making changes, consider both the short-term cost and the longer-term impact on your cover.

Related reading: Find out more about term life insurance and the differences between life insurance and term life insurance.

Review optional features on your policy

Some life insurance policies offer optional features or additional benefits that may increase the overall cost of your premiums.

If your policy includes optional features, it may be worth reviewing whether they continue to suit your circumstances. Removing features that are no longer relevant may affect both your premium and the protection your policy provides, so it's important to understand the trade-offs before making any changes.

If you're unsure how optional features apply to your policy, your insurer can explain how they work and whether changing them would affect your cover.

Choose a payment schedule that suits your budget

Life insurance policies may offer different payment frequencies, such as monthly or annually, depending on the product.

Choosing a payment schedule that fits your household budget can make it easier to keep your premiums up to date and maintain your cover over time. Before changing how you pay, check with your insurer to understand the payment options available for your policy and whether any terms or conditions apply.

Keep your policy up to date as life changes

Even if you're happy with your current cover, it's a good idea to review your policy periodically, particularly after significant life events.

A regular review can help you check that your beneficiaries, level of cover and policy details continue to reflect your current circumstances. It can also give you an opportunity to discuss any changes with your insurer before deciding whether updates to your policy are appropriate.

Reviewing your policy isn't just about managing premiums—it can also help ensure your cover continues to support the people and financial commitments that matter most.

Lifestyle and personal factors that may influence your premiums

Some personal and lifestyle factors may influence how an insurer assesses your application for life insurance. These factors help insurers understand the level of risk associated with providing cover and may affect your premiums, depending on the insurer's underwriting criteria and your individual circumstances.

While some factors, such as your age, can't be changed, others may change over time. If your circumstances change, you can contact your insurer to understand whether this could affect your policy or whether a review is available.

Smoking and tobacco use

Smoking and the use of other tobacco or nicotine products are factors that insurers commonly consider when assessing life insurance applications.

If you smoke, your premiums may be higher than those of someone who doesn't, as smoking is generally associated with a higher risk of certain health conditions. How smoking affects your premiums, and whether changes to your smoking status can be taken into account later, will depend on your insurer's underwriting requirements and policy terms.

If you've stopped smoking, you may wish to ask your insurer whether your changed circumstances can be reviewed and whether any reassessment options are available.

General health

Your overall health may also influence your life insurance premiums. During the application process, insurers may consider factors such as your medical history, current health and height and weight, as part of the underwriting process.

If your health changes over time, you may want to discuss your circumstances with your insurer to understand whether this can impact your policy.

Obesity

If you're living with obesity or are outside a healthy weight range, this may affect your premium. Insurers may consider factors such as your Body Mass Index (BMI) as part of the underwriting process.

Maintaining a healthy lifestyle can have many benefits for your overall wellbeing. If you're considering making changes to your weight or overall health, it's important to seek advice from a qualified healthcare professional.

It's also important not to assume that improvements in health will automatically lead to lower life insurance premiums. If your health or weight changes over time, you may wish to contact your insurer to understand whether your circumstances could affect your premiums.

Occupation

The type of work you do may also affect your life insurance premiums.

Some occupations involve a higher level of risk than others, which insurers may take into account when assessing an application. For example, roles involving hazardous environments or physically demanding work may be assessed differently from office-based occupations.

If your occupation changes after you've taken out your policy, it may be worthwhile letting your insurer know. They can explain whether the change is relevant to your cover or premiums.

High-risk hobbies

Some recreational activities may also be considered during the underwriting process.

Activities such as skydiving, mountaineering or scuba diving can involve a higher level of risk, and insurers may take this into account when assessing an application or policy changes.

If you no longer participate in activities that were previously disclosed, you may wish to ask your insurer whether this change is relevant to your policy. Whether it affects your premiums or cover will depend on your individual circumstances and your insurer's assessment.

Things to consider before reducing your cover

Reducing your level of cover may lower your life insurance premiums in some circumstances, but it's important to consider what you're giving up in return. Life insurance is designed to provide financial support if you're no longer there to support the people who depend on you, so any changes to your policy should be considered carefully.

Before deciding to reduce your cover, take time to review your current financial commitments, your future needs and the role your policy plays in your broader financial plans.

Understanding underinsurance

Underinsurance occurs when the amount of life insurance cover you have may not be enough to meet your financial needs if a claim is made.

For example, if your cover no longer reflects outstanding debts, ongoing living expenses or the financial needs of your dependants, the benefit paid may not provide the level of support you originally intended.

While reducing your cover may reduce your premiums, it's worth considering whether the remaining level of cover would still help protect the people who rely on you. Reviewing your circumstances regularly can help ensure your policy continues to reflect your needs as they change.

How reducing cover could affect your family

Life insurance can help provide financial support for your beneficiaries after your death, subject to the terms of your policy. Depending on your circumstances, that support may help with expenses such as:

• paying off or reducing outstanding debts, including a mortgage
• meeting day-to-day household expenses
• supporting children's education or future financial needs
• providing financial stability while your family adjusts to a change in income

Reducing your cover could mean less financial support is available if a claim is made. Before making changes, consider how your family or other beneficiaries might be affected and whether your current cover still aligns with your financial responsibilities.

When reducing premiums may not be the right option

There are situations where maintaining your current level of cover may be more appropriate than reducing your premiums.

For example, you may decide to keep your existing cover if you:

• have significant financial commitments, such as a mortgage or other debts
• have children or other people who rely on your income
• have experienced changes in your health since taking out your policy
• want to maintain a level of financial protection that reflects your current circumstances

Everyone's situation is different, so there isn't a single approach that's right for everyone. If you're considering making significant changes to your policy, it may be helpful to understand how those changes could affect your long-term financial protection. If you're unsure, consider discussing your options with your insurer or seeking professional financial advice appropriate to your circumstances.

Does age affect life insurance premiums?

Age is one of the factors insurers may consider when calculating life insurance premiums. In general, the younger and healthier you are when you apply for cover, the lower your premiums may be. However, premiums are based on a range of factors, so age is only one part of the overall assessment.

If you're wondering about the ‘best’ or ‘cheapest’ age to buy life insurance, there isn't a single answer. The right time to consider life insurance depends on your individual circumstances, including your financial commitments, the people who rely on you and the type of cover you're looking for.

Applying for cover earlier in life may mean you're assessed before age-related health conditions become more common. On the other hand, if you don't yet have financial responsibilities, your insurance needs may be different from someone with a mortgage or dependants.

It's also worth remembering that delaying an application may mean your circumstances change over time. For example, changes to your health or lifestyle could influence how an insurer assesses your application if you apply later.

Rather than focusing solely on age or the cost of premiums, consider whether life insurance aligns with your current financial situation and the level of protection you may want for the people who matter most. Reviewing your needs as your circumstances change can help ensure your cover continues to reflect your goals.

Can changing insurers reduce your life insurance premiums?

Changing insurers may result in lower life insurance premiums in some cases, but it's important to look beyond the price alone. Policies can differ in their features, eligibility requirements and underwriting processes, so a lower premium doesn't necessarily mean you'll receive the same level of cover.

If you're considering changing insurers, take time to compare what each policy includes and whether it continues to meet your needs. Reading the Product Disclosure Statement (PDS) and understanding the policy terms can help you make an informed comparison.

Compare more than just the premium

When comparing life insurance policies, consider factors such as:

• the level of cover provided
• any optional benefits or policy features
• exclusions and limitations
• eligibility requirements
• how premiums are structured over time
• the insurer's claims process and customer support.

A policy with a lower premium may offer different features or conditions, so it's important to understand the overall value of the cover rather than focusing solely on cost.

Be aware of new underwriting requirements

If you apply for a new life insurance policy, you'll generally need to go through the new insurer's application and underwriting process.

This may involve providing updated information about your health, occupation, lifestyle and medical history. Depending on your circumstances, the new insurer may:

• offer cover on different terms
• apply exclusions or premium loadings
• request additional medical information
• decide not to offer cover

Because your health and circumstances may have changed since you first took out life insurance, it's worth considering how a new assessment could affect your application.

Avoid cancelling existing cover too early

If you decide to explore a new policy, it's generally sensible to wait until you've received confirmation that your new cover is in place before cancelling an existing policy.

Cancelling your current policy too soon could leave you without cover if your application is delayed, offered on different terms or declined.

If you're unsure about the implications of replacing an existing policy, your insurer or a qualified financial adviser can help explain the considerations relevant to your circumstances.

When it may be worth seeking professional advice

Making changes to your life insurance policy can have long-term implications, particularly if you're thinking about reducing your cover or replacing an existing policy.

If you're unsure how a change might affect your financial protection, it may be helpful to seek professional advice before making a decision. A qualified financial adviser can help you understand how different options align with your personal circumstances and financial goals.

You may wish to look into professional advice if you are:

• reducing your level of cover
• replacing an existing life insurance policy
• experiencing significant life changes, such as getting married, having children or retiring
• taking on or paying off major financial commitments, such as a mortgage
• unsure whether your current cover still reflects your needs

Your insurer may also be able to explain how changes to your policy could affect your premiums, benefits or policy terms. Understanding these implications before making changes can help you make a more informed decision.

If you're reviewing your life insurance, it's worth taking the time to consider both the cost of your premiums and the financial protection your policy is intended to provide. Finding the right balance will depend on your individual circumstances and what matters most to you.

Finding the right balance

Managing the cost of life insurance is about more than finding ways to pay less. It's also about making sure your policy continues to reflect your circumstances and provides an appropriate level of financial protection for the people who matter most.

Reviewing your policy regularly, understanding the factors that influence your premiums and considering the trade-offs before making changes can help you make informed decisions over time. If your circumstances change or you're thinking about updating your cover, it's worth speaking with your insurer to understand your options before deciding what to do next.

If you're reviewing your insurance needs, you can learn more about Real Life Insurance or request a quote to explore the cover options available. Before taking out or changing a policy, read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) to help you decide whether the product is suitable for your circumstances.

Frequently asked questions

Can I ask my insurer to reduce my life insurance premiums?

You can ask your insurer whether there are options to review your policy or premiums. Depending on your policy and individual circumstances, changes such as reviewing your level of cover or updating relevant information may affect your premiums. Any changes will depend on your insurer's assessment and the terms of your policy.

Does reducing my life insurance cover affect future claims?

Reducing your life insurance cover may affect the amount that could be paid if a claim is accepted in the future. Before making any changes, it's important to understand how a lower level of cover could affect your financial protection and the people who rely on you. Your insurer can explain how changes to your policy may affect your cover.

Can life insurance premiums increase even if I don't change my policy?

Yes, life insurance premiums can increase even if you don't make changes to your policy. Whether this happens depends on how your policy is structured. For example, some premium structures are designed to change over time, while others may remain more consistent. Check your policy documents or speak with your insurer if you're unsure how your premiums are calculated.

Will improving my health lower my life insurance premiums?

Improving your health has many benefits, but it doesn't automatically mean your life insurance premiums will decrease. Whether your insurer will reassess your premiums depends on your policy, your circumstances and their underwriting requirements. If your health has changed, you can contact your insurer to understand whether a review is available.

Is it better to reduce cover or cancel life insurance to save money?

There isn't a single answer that suits everyone. Reducing your cover or cancelling your policy may lower your ongoing costs, but it could also reduce or remove the financial protection your policy provides. Before making a decision, consider your current financial responsibilities, the needs of your beneficiaries and the long-term implications. If you're unsure, your insurer or a qualified financial adviser can help you understand the options available.