Around half of Australians without life insurance say it is too expensive and they cannot afford to take it out, according to new statistics from TAL.
The insurer released the results of a survey of 1200 consumers, in which respondents were asked to rank a list of possible motives for not taking out life cover (a collective description for the four main types of life insurance). The study found that, by a significant margin, the number one reason why the main income earner in a household did not have life insurance was because it was too expensive.
After affordability (which was rated the primary reason for not taking out cover by 47% of respondents), not having any dependents to protect (18%) and a belief that health insurance provides the same level of protection (17%) were the next most common reasons. Rounding out the top five reasons for not having insurance were an expectation that other assets could be used (16%) and that life insurance is not important (13%).
Interestingly, the cost of insurance was a significant issue for all consumers, regardless of age. 50% of those aged 18-24 rated it as their primary reason for not having cover, compared with a very similar result of 44% among those over 50.
TAL Group CEO, Jim Minto, said the results were a major cause for concern:
“We know from our polling that some people will not let their insurance drop for their car or even their phone, but when people are not having life insurance due to home budget pressure or because of a lack of understanding then we know the life industry has a responsibility to help educate people on the risks they face and benefits of life protection.
“The great irony is that times of reduced confidence in job and financial security are the times when people need life insurance protection the most. Life insurance is essential, not a luxury that people should let go of easily. Being unable to earn an income can have life-long and devastating consequences for Australians, their dependents and families.”
Affordability isn’t the issue, priority is! If anything, life insurance premiums have actually come down a little over the last decade. I regularly come across potential clients who tell me that they don’t have the money in their budget to factor in life insurance premiums, however are happy to spend up to $100 per week on cigarettes?? As a nation, we must start prioritising the important things in life, financially protecting our family & income!!
Insurance is too expensive but the cost to deliver it is more expensive COMPLIANCE RULES REGULATION are all good however over the top The average Australian cant afford a financial planner thank RIPPOL COOPER AND SHORTEN you the people you served to protect you have destroyed any chance they had of moving forward.
Insurance could be much cheaper if the Insurance companies priced a nil commission product correctly.
I would estimate over 50% of the premium is sales costs. How about instead of crying the public is under insured these companies such as TAL produce a properly priced Nil Commission product range !
Ian, do you work for no income. I bet not! maybe a government employee, who gets exactly the correct level of pay for the level of expertise and effort you put in. How stupid are you people. Adviser time is not free, its not free when the government pays for it, in fact when you take into account total costs it is usually much more expensive. As they will have 4 people doing a job on person did in private Enterprise. they will all need a car, long service leave, holiday pay, days off to look after the sick dog, their massive building etc etc. There is a section of the community that will take everything and pay for nothing and its much worse after 6 years of Labor, the world (the fella up the road who has more than me) owes me mentality being pushed.
Insurance is not a high priority and not well understood in the context of how it should be incorporated as a necessary part of a budget.
Affordability is usually not an issue. It is peoples inability to rank Insurance as a non negotiable part of life. It is amazing what Australians spend their money on that are completely unnecessary, yet rank higher in importance and unfortunately, this mindset is the reason why life Insurance must be sold, especially qualityTrauma and Income Protection policies.
Until the perception of the real importance of Life Insurance changes in peoples thinking, price will always be a issue, just as it is with everything we purchase in todays fast paced, I want it now and I want it cheap world we live in.
Half the population voted Labor so that quite possibly is the half without life cover.
Labour govt’s and mainstream media promote a welfare mentality in this country. Why have insurance when the govt will bail you out? It’s not until its too late that many families realise that maybe investing in insurance might have been a good idea instead of cigarettes, grog, pot, new car, Bali holiday etc. it’s the perito principle. 20 p’cent will work hard, create wealth and buy good insurance while the other 80 want someone else to bail them out when a crisis arises. Insurance works when it is needed most. It changes people’s lives. Forget commissions, there is no such thing as a bad insurance policy. Insurance has to be sold! Thank God for advisers!
I recently paid out a trauma claim for $279,000 to a 32 year old married lady. Hey get this, she has been on income protection claim for 8 months and may be on partial disability for an indefinate period for cervicle cancer. Why on earth would a 30 year old take out insurances at her age. Because we sat down with her and recommended that she package all of her protection around her super fund making it affordable and adequate just in case it may be needed. She agreed that insurance was way more valuable NOW than her retirement nest egg in 37 years time. At no time has she suggested that we made too much commission on the sale of her insurances. She worships the ground that we walk on…..no joke!
In fairness, I believe the insurance company paid out that claim.
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