Life insurance in Australia: Complete guide for expats

Life insurance is a way of taking care of your finances and looking after loved ones in the event of your death. It’s not compulsory in Australia, but many people take out a policy to cover funeral costs, settle outstanding bills, and provide financial security for those left behind. This includes expats who may have settled in Australia with dependent family members.

This guide covers the essentials of life insurance in Australia. It aims to give expats living in the country a good understanding of the topic, but should not be treated as professional advice. For guidance on your personal situation, you should consult a qualified insurance specialist in Australia.

What is life insurance?

Life insurance in Australia typically provides a lump sum payment to your chosen beneficiaries in the unfortunate event of your death. These beneficiaries are often dependents, such as your spouse, partner, or children, but you can nominate anyone you wish.

The payment can help cover funeral expenses, repay outstanding debts, and support the ongoing living costs of those you leave behind.

Life insurance in Australia is sometimes called:

• Life cover
• Death cover
• Term life insurance

Some policies may also pay out if you are diagnosed with a terminal illness or suffer a serious injury that limits your life expectancy.

For expats, life insurance can be especially important as a way of protecting dependents who rely on your income, particularly if they remain in Australia.

Types of life insurance available in Australia

In many countries, there are two main types of life insurance:

• Term life insurance: Covers you for a fixed period (e.g., 10, 20, or 30 years).
• Whole life insurance: Covers you for your entire lifetime, with the payout made whenever you die.

However, whole life insurance is no longer commonly offered in Australia. Instead, most insurers provide term life insurance (sometimes called ‘life cover’ or ‘death cover’) which typically renews automatically each year or can usually be renewed after the initial term ends.

Term life insurance is especially useful during periods of high financial responsibility, such as when you have a mortgage, dependents, or other ongoing financial commitments. Many people also maintain their cover into retirement as a way to leave financial support for their loved ones.

Australian life insurance policies generally offer two main premium types:

• Stepped premiums: Start lower when you’re younger but increase as you age.
• Level premiums: Start higher but remain more stable over time.

Unlike some overseas policies, Australian life cover does not usually include a savings or investment component, meaning you cannot cash it out if you cancel the policy early.

Many Australians hold life insurance through their superannuated fund (super fund) – a compulsory, employer-funded retirement savings account. Most super funds automatically include a basic level of life cover, though the amount is often limited and may not meet your full insurance needs. You can usually increase or adjust this cover through your super provider.

Related types of insurance in Australia

• Total and Permanent Disability (TBD) Insurance: Pays a lump sum if you become permanently unable to work due to illness or injury.
• Critical Illness (Trauma) Insurance: Pays a lump sum if you are diagnosed with a serious medical condition, such as cancer, heart attack, or stroke.
• Income Protection Insurance: Provides a regular income (usually up to 70-75% of your salary) if you are temporarily unable to work due to illness or injury.
• Funeral insurance: Helps cover funeral expenses and sometimes small outstanding debts.

Some term life insurance policies include limited TPD cover, but it’s always important to check your policy details before purchasing additional coverage separately.

Life insurance requirements for expats in Australia

Requirements for life insurance in Australia vary between insurers, so it’s important to check each company’s eligibility rules before applying. Many insurers set conditions based on residency status, age, and health. For example, Allianz offers life insurance only to Australian permanent residents aged 16-65.

When you apply for a policy, insurers typically ask about your:

• Age
• Medical history, including family history of health conditions
• Employment and occupation risks
• Lifestyle, such as smoking, alcohol use, or high-risk activities

Your eligibility for coverage and the premiums you pay will depend on these factors. Some insurers also offer simplified or partially underwritten life insurance, which doesn’t require detailed medical or lifestyle information. However, these policies usually come with lower coverage limits or more exclusions.

If you’re applying for high-value coverage or have a significant medical history, you may need to undergo a medical exam as part of the application process.

How much life insurance do you need?

The amount of life insurance you need depends on what you want the payout (the benefit) to cover if you pass away. Think about whether you want to:

• Provide ongoing financial support for your family or dependents, or
• Simply cover funeral costs and any outstanding debts.

You can estimate how much coverage you need by following these steps:

1. Add up your total debts and financial commitments – for example, your mortgage, loans, and credit card balances.
2. Estimate funeral and related expenses.
3. Work out the financial support your dependents will need – multiply your net annual income by the number of years you’d like to provide for them.
4. Add these amounts together, then subtract any existing assets or funds that could be used to cover these costs (such as savings, investments, or super funds).

You can use the Australian government’s Moneysmart calculator to estimate how much coverage you are likely to need.

If you are an expat in Australia, you may need to factor in additional costs – such as repatriation of remains, relatives returning home, or covering dependents overseas. This might require coverage in multiple currencies.

Whatever your circumstances, it’s a good idea to speak with a qualified insurance adviser who can help tailor your coverage to your specific needs.

Life insurance costs and premiums in Australia

A number of factors affect how much your life insurance premiums will be in Australia. These include:

• Age – older applicants generally pay high premiums
• Gender
• Health status and medical history
• Lifestyle habits – e.g., smoking or alcohol consumption
• Occupation
• High-risk hobbies – such as extreme sports
• Coverage amount and length

Premiums vary widely based on such factors. According to Finder (2025), average monthly life insurance premiums in Australia range from AUD 25.25 for a non-smoking female aged 25, to AUD 418.69 for a male 55-year-old smoker.

You can get life insurance quotes online from many Australian providers, such as:

• Allianz
• Real Life Insurance

If you’re looking for cheap life insurance cover, you can reduce your premium rates by:

• Not smoking and taking up healthy lifestyle habits
• Paying annually instead of monthly, as some companies offer discounts for this
• Enquiring about bundle offers, where you buy life insurance with other insurance products (e.g., health or home insurance)

Buying life insurance in Australia as an expat

The process of buying life insurance in Australia varies between providers, but it generally involves the following steps:

Step 1: Choose your policy and coverage

Start by estimating how much coverage you might need. You can use an online life insurance calculator to get an idea. Next, decide if you want extra cover, such as TBD Insurance or Trauma Insurance.

If you’re unsure about anything, consider consulting a life insurance expert for guidance.

Step 2: Compare providers

You can compare quotes directly using online comparison tools, or work with an insurance broker who can help you compare different policies. Keep in mind that brokers may charge additional fees.

When comparing insurers, look beyond the price. Consider:

• Policy flexibility (e.g., options to pause payments or change cover if your situation changes)
• Cancellation terms and any exit fees
• Customer service and reviews
• Expat support, such as global coverage or assistance services overseas

Companies offering life insurance in Australia include:

• Allianz
• NobleOak
• Real Insurance

International providers with expat-friendly global plans include:

• Atlas Life
• Clements
• Unisure

Before you buy a policy, check that the insurer has a license from the Australian Securities and Investments Commission (ASIC).

Step 3: Complete your life insurance application

You can apply with most Australian insurers online, though you can also apply by phone or in person. You’ll usually need to provide:

• Personal information (e.g., ID, address, bank account)
• A completed medical and lifestyle questionnaire
• Financial information, such as payslips or tax returns

Step 4: Have a medical exam, if required

Depending on your age, health, and amount of cover, you may need to complete a short medical exam. This may be done by your own doctor or by a medical professional appointed by the insurer.

The insurer will then underwrite your application – this means assessing your risk and deciding:

• Whether to approve your application
• The terms of your policy
• The premium you’ll pay

Employer-provided life insurance

In Australia, life insurance is often included as part of superannuation (super fund) — the compulsory retirement savings system. This type of insurance usually includes basic life cover and sometimes TPD cover, but often excludes trauma cover. You can usually choose to increase or customise your cover through your super fund if you wish.

Some larger employers also offer separate life insurance policies as part of their staff benefits. These are often fully or partially paid for by the employer, with the option for employees to top up their coverage.

Before taking out a separate life insurance policy, it’s worth checking:

• What life insurance you already have through your super fund or employer
• Whether you can increase your existing cover to meet your needs

International life insurance vs local coverage

If you buy life insurance in Australia, you can choose between a local Australian insurer or an international provider offering global coverage. Your choice will depend on your personal situation, so it may be worth consulting with an insurance specialist before making a decision.

Many Australian life insurance policies remain valid if you move abroad, but this is not always the case, and cover may be affected if you leave the country. If you have life insurance through your super fund, coverage may no longer apply if you are no longer an “ordinary resident”.

International life insurance can sometimes be preferable if you are likely to move between different countries, or if your beneficiaries live outside Australia. Although local Australian policies often allow overseas beneficiaries, claims processes can be complicated for non-residents, and there are cross-border tax issues to consider. Global policies are designed with these things in mind, making things easier, although premiums are usually more expensive.

If you are a beneficiary of a life insurance policy from overseas, you can use a provider like Wise for low-cost and convenient cross-border payments. International money transfers are made using the mid-market exchange rate with no hidden fees. You can also open a multi-currency account to manage funds in 40+ currencies.

Life insurance beneficiaries and international considerations

If you want to include international beneficiaries in an Australian life insurance policy, check first with your insurer. While global policies usually allow overseas beneficiaries, Australian-based insurers may have restrictions or charge higher premiums.

Some key questions to consider:

• Are there any limits on the number of foreign beneficiaries or caps on payouts?
• Are any countries excluded?
• What is the claims process for international beneficiaries, and how long does it usually take to receive payment?
• What are the international tax implications?
• How will funds be transferred, and what exchange rates apply?

When sending overseas payments, using a currency transfer specialist can lower costs and ensure safe transactions. Wise offers transparent fees using the mid-market exchange rate. You can also get discounts on large transfers, helping beneficiaries receive more on sizable lump sum payments.

Life insurance when moving countries

If you think you might relocate overseas in the future, check with your insurer before buying life insurance. Many Australian life insurance policies do allow you to move abroad, but your coverage terms or requirements may change. For example, your insurer might ask you to keep an Australian bank account or residential address on file.

If you plan to live abroad long term or travel frequently, an international life insurance policy may be a better fit. These global policies are designed for cross-border living and help ensure that coverage continues no matter where you live.

Tax implications of life insurance in Australia

In most instances, life insurance payouts in Australia are tax-free. The main exception applies to life insurance held inside a superannuation fund. If the payout goes to a beneficiary who is not a financial dependent (for example, an adult child not financially supported by the policyholder), part of the payment may be taxed at the beneficiary’s marginal income tax rate.

Premiums for life insurance policies are not tax deductible. However, premiums from income protection insurance are generally tax deductible, provided the policy is held outside of a super fund.

If you are an overseas beneficiary receiving a payout from an Australian life insurance policy, whether you owe tax will depend on the tax laws of the country where you live.

Because tax laws can be complex, especially when multiple countries are involved, it’s best to seek advice from an Australian tax professional or an international tax adviser.

Life insurance and estate planning

Australia doesn’t have inheritance or estate taxes. However, some assets passed on through an estate may be subject to capital gains tax and income tax, depending on the circumstances.

This usually doesn’t affect life insurance policies. If your policy has a nominated beneficiary, the payment goes directly to that person and is generally tax-free.

If there is no nominated beneficiary, or if the nomination is out of date, the policy proceeds may be paid into the estate. In that case, the funds may be distributed according to the deceased’s will or probate process, and taxes may apply depending on who receives the payment and how it is handled. .

To avoid delays or unexpected taxes, keep your beneficiary details current and let your insurer know whenever your circumstances change. It’s also a good idea to speak with a financial adviser or estate planning specialist for advice tailored to your situation.

For expats or those with beneficiaries overseas, transferring a life insurance payout can involve large sums. Wise offers low-fee payments at the mid-market rate. You can send amounts of up to approx. £1 million (or equivalent), with discounts on transfers over £20,000 (or equivalent) each month. There is also a dedicated customer support team for large transfers.

Common life insurance mistakes to avoid for expats

If you’re an expat taking out life insurance in Australia, here are a few common mistakes to look out for – and how best to avoid them:

• Underestimating coverage needs: Living costs and exchange rates can affect the value of payments in other countries. To avoid underinsuring, factor in local expenses where your beneficiaries live, and consider currency fluctuations.
• Failing to update your insurer of changes: Relocating without informing your insurer can invalidate your policy or cause other problems. Always notify your insurer if you or your beneficiaries move to a different country.
• Overlooking cross-border tax implications: Tax laws vary between countries, and payouts may be taxed differently overseas. Ask a tax advisor how both Australian and foreign rules affect your policy.
• Not checking international coverage: Although many Australian life insurance plans remain valid overseas, some require you to remain an Australian resident. Before signing, check how moving abroad affects your policy.
• Missing payments during relocation: Moving overseas or changing banks can interrupt premium payments. Inform your insurer in advance of any relocation to ensure no payments are missed.

Life insurance claims process

If you need to make a claim on a life insurance policy in Australia, contact your insurer as soon as possible. If your cover was arranged through an insurance broker or provided through your employer (as part of a group plan), you may need to contact them first. You can usually find the right contact details in your policy documents or on the insurer’s website.

Most insurers let you lodge a claim online, by phone, or by post. You’ll typically need to provide:

• The policy number
• Details of policyholder and claimant(s)
• A death certificate, or a medical report if the claim is for critical illness or serious injury rather than death)
• Proof of identity and address for the claimant(s)

Some insurers may also ask for proof of relationship to the policyholder (for example, a marriage or birth certificate).

The exact process can vary between providers. Here’s the Allianz claims process as an example.

After you submit your claim and all required documents, the insurer will review them and let you know the outcome. In most cases, life insurance claims are processed within 2-3 months. Under the Australian Life Insurance Code of Practice, insurers must make a decision within six months (or within 12 months if there are reasonable delays, such as waiting for information from third parties).

If you run into any problems, contact your insurer first. If the issue isn’t resolved, you can make a complaint to the Australian Financial Complaints Authority (AFCA).

For more information on how to make a complaint, visit the Moneysmart website.

Getting professional advice in Australia

Getting advice from a qualified and licensed professional can help you make informed decisions and avoid costly mistakes when buying life insurance in Australia.

You can seek advice from:

• Insurance companies (for information about their own products)
• independent insurance brokers, who can compare products from different providers
• Financial advisers or legal professionals, who can give broader guidance based on your personal circumstances

The Australian Government’s Moneysmart website offers helpful information on how to choose a financial adviser. You can also check whether an adviser is licensed by searching the Financial Advisers Register.

Conclusion

Choosing the right life insurance policy takes careful consideration to ensure it meets your personal and financial needs. This guide has outlined the main features of life insurance in Australia, helping you understand your options and navigate the process with confidence. It also highlights the importance of getting good professional advice before making any final decisions.

If you receive a lump sum life insurance payout and need to send or convert the funds internationally, Wise can help you handle this. You can send high-value payments (up to the equivalent of £1 million) to 140+ countries and convert money between 40+ currencies using the mid-market exchange rate – with no hidden fees. This helps you keep more of your money when transferring funds across borders.