Nearly half of Australian consumers considering life insurance feel confused and unconvinced by what they encounter, according to a new global report, with many abandoning the purchase before it is complete.
The World Life Insurance Report 2027, researched jointly by the Capgemini Research Institute and US-based global insurance and financial services trade association, LIMRA, surveyed more than 6,000 consumers worldwide, including 425 in Australia. It found 47% of Australian consumers considering a policy feel confused, uncertain or unconvinced by the information they find – higher than the 42% recorded globally. Across all markets, one in four consumers drop out of the purchase journey before completing it.
Confusion and cost top the list of barriers
The report points to overly technical language, affordability concerns and a perceived lack of relevance to a consumer’s life stage as leading barriers to purchase, where key findings included:
- 39% of Australian consumers cited cost as a barrier (35% globally),
- 28% cited a lack of clarity and transparency on coverage and policy terms (30% globally)
- 26% said life insurance was not relevant to their current life stage (25% globally)
…the affordability barrier is often a matter of perception rather than actual cost
LIMRA’s research suggests the affordability barrier is often a matter of perception rather than actual cost. “Our research shows affordability is often a perception problem – consumers believe life insurance costs far more than it does – and that makes education the industry’s biggest opportunity,” said Bryan Hodgens, Senior Vice President and Head of LIMRA Research. “We need to bring consumers into the fold and guide them through the entire process, keeping it simple, embracing tools like AI, but never losing sight of how essential human advisors are.”
Contact drops away after the sale
The report also found that consumer engagement often falls away once a policy is issued.
- 41% of Australian policyholders said they rarely or never hear from their insurer after purchase, compared with 36% globally
- 76% said the only contact they received related to billing and renewals
- 42% of discontinue their cover within three years of purchase
“When it comes to life insurance, [consumers] recognise its importance, but complexity at the point of purchase and post-sale silence undermine policy ownership – putting customer relationships at risk and triggering exits that cost the industry billions,” said Samantha Chow, Global Leader for Life Insurance, Annuities and Benefits Sector at Capgemini.
AI enters the research process, but advisers remain central
The report identified generative AI as a growing part of the research process, with around half of consumers globally planning to use such tools to discover and compare life insurance products, though two-thirds said they still prefer working with a human adviser when finalising coverage decisions.
Opportunities for Advisers
The report frames several of these gaps as openings for insurers and advisers. In the workplace, 48% of Australian employees had not formally assessed their employer-provided coverage yet reported feeling moderately confident in it – a combination that can leave people with a false sense of security and gaps in protection they are unaware of.
On retention, 48% of consumers say they would be more likely to stay with an insurer that offers proactive guidance before, during and after purchase, suggesting ongoing contact as a lever against early discontinuation.
Where Australia performs well
Australian employees fared better than the global average on one measure. More Australian employees receive coverage adequacy guidance through group insurance than the global average (34% compared with 25% globally), which the report said supports better-informed coverage decisions.
Click here or on the image below to access Capgemini/LIMRA’s The World Life Insurance Report 2027, entitled The relevance premium: How consumer centricity unlocks growth.
