We recently took a look at close to 1,500 life insurance policies to see what cover levels people are actually taking out. While everyone’s needs are different, looking at the medians gives a useful snapshot of how cover typically changes across life stages.
Age 20–29
- Life: $710,134
- Total and Permanent Disability (TPD): $697,646
- Trauma: $210,172
- Income Protection: $5,734/month
Age 30–39
- Life: $964,028
- TPD: $922,224
- Trauma: $147,151
- Income Protection: $6,507/month
Age 40–49
- Life: $1,167,946
- TPD: $1,042,518
- Trauma: $199,087
- Income Protection: $6,933/month
Age 50–59
- Life: $671,397
- TPD: $655,172
- Trauma: $122,314
- Income Protection: $7,456/month
Age 60–69
- Life: $520,000
- TPD: —
- Trauma: —
- Income Protection: —
What we see is that cover levels often peak in people’s 40s, then taper off as debts reduce, children grow up, and overall wealth increases. Income protection levels tend to rise slightly with age, reflecting higher incomes.
Of course, there are many outliers and every person’s circumstances will be unique. The real takeaway is that insurance should always be tied to purpose. Whether it’s paying off a mortgage, making sure the kids can stay at school, or replacing income for a set period, clarity about why you hold a policy helps ensure it stays relevant.
And as life moves on, you should generally need less cover rather than more. Reviewing your insurance in line with changing priorities can help you avoid paying for more than you need, while still making sure the essentials are protected.
