February 28, 2019
A new study commissioned by MetLife Australia has found that many Australian couples and families could face financial hardship if the secondary income earner was unable to work.
In findings that may serve to enhance adviser conversations with clients, the MetLife Adviser-Client Relationship Report found that, of consumers with life insurance who are married or in a de facto relationship, 73% have more than one income earner in the household. Of this group, 58% said that they wouldn’t be able to maintain their existing lifestyle for any longer than two years should the secondary income earner be unable to work.
The findings, which examined consumer and SME attitudes to purchasing life insurance through a financial adviser, revealed a significant number of these secondary income earners were, not surprisingly, working casual or part-time.
…this group holds lower levels of insurance in all categories
The report found this group holds lower levels of insurance in all categories when compared to their full-time counterparts:
- Death cover is held by 70% of casual and part-time workers compared to 81% of the overall group
- TPD cover is held by 51% of casual and part-time workers compared to 60% of the overall group
- Income Protection is held by 48% of casual and part-time workers compared to 58% of the overall group
The report also found that the largest difference is seen in Trauma cover, where only 4% of casual and part-time workers held this category of cover, compared to 35% of the overall group.
Matt Lippiatt, MetLife Australia’s Head of Retail Sales, reaffirmed underinsurance is a real problem in Australia, particularly among casual and part-time workers, where these workers are also less confident than full-time workers in explaining the various features of their life insurance to a friend or colleague.
“Particularly for families with children, if one partner is staying at home or working part-time, it can be just as important to insure them as it is the primary breadwinner,” said Lippiatt, who said the findings highlight an opportunity for advisers to review their clients who have recently started a family and engage with secondary income earners to ensure their income and lifestyle are protected.