Is your family protected?

What you need to know when considering life insurance.
Parents with two young children.

Life insurance can help to protect you and your loved ones financially if something unexpected happens.

Consider these questions before taking out life insurance.

Isn’t life insurance a part of superannuation?

You may have life insurance through your superannuation fund or as part of your employment package. However, life insurance through your superannuation fund may not provide enough cover.

Ask yourself these questions when reviewing the cover available through your superannuation fund:

  • How much cover do I have?
  • Is my sum insured amount reducing as you get older?
  • Is this cover adequate for your needs?

Use this calculator to work out how much cover you may need.

Will your mortgage and the cost of raising kids be covered?

According to the Australian Bureau of statistics, the average Australian mortgage is almost $600,000 (November 2021) and Australian Institute of Family Studies estimates it can cost more than $170 a week for a low-income family to raise a child, based on a 2018 study.

If you are not able to meet major financial commitments due to not having enough insurance, this could result in you and family having to sell your home, move suburbs or change schools.

How does Workers Compensation, government assistance and private health insurance factor in?

Workers Compensation provides limited compensation if you are injured at work and private health care is an important part of your overall financial plan. It is possible to get a government pension if you are disabled.

However, there are limitations:

  • Workers compensation is not available to self-employed people.
  • Workers compensation doesn’t cover non work-related illness or injuries.
  • More than 50% of all serious accidents happen away from work*.
  • Private healthcare can help pay some of your medical bills, but life insurance can help with life expenses like your mortgage or rent and household bills. The Disability Support Pension (DSP) is currently less than 30% of the male average wage, or $24,775.402 per annum for a single person**.

Can I afford life insurance?

While life insurance may seem like a discretionary purchase, ask yourself what would happen if your income stopped. What would happen to your mortgage, daycare or school fees and other bills?

Consider the cost of life insurance in relation to other insurances and expenses:

 Expense  Average monthly cost
 Daily coffee  $120
 Car insurance^   $90.54
 Life insurance^  $53.59
 Income protection^  $57.15

^Quote criteria:

The RACQ comprehensive car insurance premium is for a 35-year-old male living in Brisbane. He drives a 2019 Toyota Camry Ascent, automatic, market value, $650 excess. He has held his licence for 15 years and his car is on the street during the day and garaged at night and there is no finance on the vehicle. Monthly premiums include the policy fee, government taxes and charges. Quoted 29 March 2022.

The RACQ Life and Income Protection policies assume a 35-year-old male, living in Qld, non-smoker, degree-qualified tax accountant, annual income $100,000, Life cover of $500,000, $5,833 monthly Income Protect benefit, 90-day month waiting period, benefit period 2 years. Quoted 1 April 2022.

Find out more about RACQ Life Insurance

*Australian Bureau of Statistics National Health Survey – Summary of Results, Australia – 4364.0, 2004-2005.

**Figure current at 20 March 2021 and includes the Pension Supplement and Energy Supplement.

RACQ’s Life and Income Protection Insurance suite of products described on this website is distributed by RACQ Operations Pty Ltd ABN 80 009 663 414, Authorised Representative Number 234978 (RACQO), an authorised representative of AIA Financial Services Limited ABN 68 008 540 252, AFSL 231109 (AIAFS) and is issued by AIA Australia Limited ABN 79 004 837 861, AFSL 230043 (AIAA). RACQO is a distributor only; it does not sell, issue or guarantee these products. AIAFS and other authorised representatives of AIAFS are also involved in distributing these products. Descriptions of product benefits and features are a summary only.

This provides general information only, without taking into account factors like the objectives, financial situations, needs or personal circumstances of any individual and is not intended to be financial, legal, tax, health, medical, nutritional or other advice. Before acting on the information in this publication, individuals should consider its appropriateness having regard to such factors.
You should read the relevant Product Disclosure Statement (PDS), any applicable Supplementary PDS and Target Market Determinations available on this website before deciding to acquire or continuing to hold any of these products. Cover is subject to terms, conditions, limitations and exclusions.

AIA Australia has adopted the FSC Life Insurance Code of Practice, which contains minimum standards of service that customers can expect from insurers. The code can be found at

Related topics

Things to note

The information in this article has been prepared for general information purposes only and is not intended as legal advice or specific advice to any particular person. Any advice contained in the document is general advice, not intended as legal advice or professional advice and does not take into account any person’s particular circumstances. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives and needs.