How much does life insurance cost?

Whether you're starting a family, buying a home, or planning for the future, life insurance offers peace of mind that your loved ones will be financially supported if the unexpected happens.

This article breaks down what life insurance can cover, how much you might need, and the factors that influence cost – from your age and health to the type of policy you choose.

You’ll also find practical tips for fitting life insurance into your budget.

Life insurance is like a financial safety net for your whānau. It’s designed to provide your loved ones peace of mind and financial security if something were to happen to you.

Life insurance could help your family cover expenses such as:

• Mortgage or rent payments
• Everyday living costs
• Childcare or school fees
• Outstanding debts like personal loans or credit cards
• Funeral, legal, and medical expenses
• Long-term goals like education, travel, or retirement.

Let’s imagine your household earns $120,000 annually, with you contributing half and carrying a $500,000 mortgage. If your income disappears, your partner may struggle to cover costs like loan repayments, childcare, or bills. Life insurance can help bridge that gap, easing financial pressure, and giving your family time to adjust.

Everyone’s unique, so there’s no one-size-fits-all answer to how much life insurance you need. The right amount of cover depends on you and your circumstances. 

You don’t have to figure this out alone. The Chubb Life team can help assess your situation and work with you to determine the right level of cover.

Here are some things to consider. 

Do you have any mortgage, personal loans, credit cards, or business debt? If something happens to you, your loved ones may need to take over repayments. This is especially important if your loans are secured by collateral like the family car or home.

It’s not fun to think about, but it’s wise to estimate potential funeral, medical, and legal expenses should the worst happen. Our trusted insurance partner Chubb Life includes a built-in funeral benefit to help cover immediate costs.

Think about your family’s essentials like food and medical bills, plus discretionary costs like holidays or education.

How long is your family likely to need financial support? If you have children, ageing parents, or a partner who relies on your income, factor in their future needs.

Premiums can be paid fortnightly, monthly, or annually, and they’re based on a mix of personal factors – some you can control, and some you can’t. 

Here are some key factors that can affect your premium: 

• Your age: Premiums are usually lower when you're young and healthy. 
• Your biological sex: Men and women face different health risks, which can influence costs. 
• Your health and lifestyle: Pre-existing conditions, a history of illness, and high-risk activities – like smoking, or certain hobbies – can all increase your premium.
• Your occupation: A job that puts you in danger can also impact the cost of your life insurance premium.
• Your cover level and policy type: More cover means higher cost (but also more protection). 

Understanding what influences the cost of life insurance can help you plan ahead, make changes, and find insurance that fits your needs and budget. 

It’s important to find a level of insurance you can afford. If you’re budget-conscious, there are some simple ways you could keep costs down without compromising on cover.

Here are some practical tips.

Locking in cover when you’re relatively young could mean savings in the longer term.

Taking out insurance early means any health conditions that develop after you’re covered will be included, which can help you avoid exclusions or higher costs later. Waiting until you’re older and already have conditions often leads to higher premiums or limited coverage.

A few small changes (like cancelling unused subscriptions) might help you find room for cover. Use a budgeting tool to track your spending and get an accurate picture of your expenses.

Simple lifestyle changes like staying active and eating well can have long-term benefits. When you apply for life insurance, your health is assessed through medical underwriting. Habits like smoking or vaping can increase your risk profile and may lead to a higher insurance premium – something worth keeping in mind when taking out your cover.

High-risk activities like skydiving or mountain climbing can impact your insurance premiums due to the increased risk of injury or serious harm. Exploring safer alternatives could help reduce costs while keeping things fun.

As your financial situation changes, take another look at your policy. If you’ve paid off a large debt or your children become financially independent, you may not need as much cover, which could lower your costs.

Ready to explore your options? With support from Chubb Life, you can find the right fit to protect what matters most – without breaking the bank.