You've probably already done it. Late at night, you typed "do I need income protection?" into ChatGPT, got a confident answer and felt a bit more sorted.
You're not alone. About 58% of Australians aged 14 and over use AI every month (Roy Morgan, Q1 2026), and roughly 1 in 6 are already using it for financial decisions (Compare Club AI Index). So can ChatGPT give you life insurance advice in Australia? Not legally, and not reliably. It's a handy place to start learning, but it can cost you real money if it's where you finish.
What is AI actually good at when it comes to life insurance?
Explaining the basics. Ask what total and permanent disability (TPD) cover is and you'll usually get a clear answer: a lump sum if you can't work again. Ask about waiting periods and it'll tell you it's the gap between getting sick or injured and your income protection payments starting. It's also decent on stepped premiums (they rise as you age) versus level premiums (they start higher but stay steadier).
So what does that mean for you? Spend 10 to 15 minutes here to cut through the jargon. That's where the value stops.
Where does ChatGPT get life insurance wrong?
A UK test put 100 personal finance questions to AI. 56 answers were right, 27 were misleading or incomplete, and 17 were wrong. A US study found 57% of life insurance answers contained errors (Choice Mutual). Australian testing has also caught outdated super contribution caps.
We ran our own test. We asked ChatGPT whether insurance inside super is cheaper than a standalone policy. It said it often is. Across more than 500 Skye clients, the numbers pointed the other way: about $2,762 a year for cover set up outside super, compared with about $4,200 if the same people had held it through their super fund. Default cover inside super is usually cheap, but premiums climb as you increase the amount.
We also asked about getting income protection with a history of depression. ChatGPT suggested an insurer might add a loading, which is an extra charge on your premium. In our experience, insurers more often apply an exclusion (they won't pay claims for that condition) or decline. It also hinted that super might skip the medical questions, which isn't the case when you increase your cover.
So what's the actual risk? If you have any health history, the gap between a loading and an exclusion could mean a claim that isn't paid years from now.
Why can't AI do what an adviser does?
Underwriting is the insurer's assessment of your health, job and risk. It decides your price and what gets excluded. Insurers keep their underwriting rules close, so AI mostly hasn't seen them. The same person can get standard rates from one insurer, a loading from another and an exclusion from a third. AI can't speak to an underwriter, can't see live pricing and can't set anything up for you.
It also tends to tell you what you want to hear. Ask "I'm 28 and healthy, is income protection a waste of money?" and then flip the question around. You'll often get agreement both times. And 45% of young Australians who used AI for financial advice followed it without checking (RACQ Bank survey, Oct 2025).
So what does that mean for you? You could talk yourself out of cover you need, or into cover you don't, with nobody pushing back.
Who do you complain to when AI gets it wrong?
Air Canada's chatbot invented a refund policy, and a tribunal held the airline liable. Closer to home, a large consulting firm part-refunded the federal government after a $440,000 report contained fabricated citations. Careful, experienced professionals got caught out.
Skye advice is provided under an Australian financial services licence (AFSL). If something goes wrong, you can complain to us, and then to AFCA, the independent complaints body. With a chatbot, there's no one to complain to.
So what's the actual cost of trusting a chatbot? If it's wrong, the loss is yours, and there's no one to put it right.
How should you use AI before talking to an adviser?
Use it for 10 to 15 minutes to learn the lingo, then write down the questions you still have. After that, gather your real details: your latest super statement, your current cover and premiums, any loadings or exclusions already on your policies, your health history, your job duties (they affect how you're rated and priced) and how much cover you think you need.
So what's the next step? Take that list and your ChatGPT answers to an adviser who can check them against your actual situation.
Frequently asked questions
Can ChatGPT give life insurance advice in Australia?
It can explain concepts, but it can't give personal advice. It isn't licensed, can't assess your circumstances and can't be held accountable if it's wrong.
Is it safe to use AI to compare life insurance policies?
It's fine for learning the terms. It can't see live pricing or underwriting outcomes, and it can get product details wrong, so don't rely on it to compare or choose a policy.
Is insurance inside super cheaper than outside super?
Not necessarily. Default cover inside super is often cheap, but premiums can climb as you increase the amount. Across more than 500 Skye clients, the average came out lower outside super.
Can AI tell me whether I'll be approved or get a loading?
No. That's decided by each insurer's underwriting, and different insurers can reach different outcomes for the same person.
Should I check what ChatGPT told me with an adviser?
Yes, especially before you cancel, change or take out cover. Bring the answers you got and we'll check them against your actual situation.
This is general information only and doesn't account for your personal circumstances. If you want someone to check what AI told you, book a chat with a Skye adviser and bring your ChatGPT questions and policy documents.