Skip to main content

According to research commissioned by TAL, only around half of all Australians hold some form of life insurance, and many are under-insured.


According to the ATO, there are almost twice as many active life insurance policies than there are working-aged Australians, but that does not mean Australians are adequately insured. 

We look at how many Australians have life insurance, the reasons for under-insurance and explore what adequate insurance looks like. 

At a glance
There are almost 22 million active life insurance policies in Australia, a recent federal parliamentary report found. Yet there are just 12.5 million working-aged Australians (aged 15-64), according to figures published by the Australian Institute of Health and Welfare.

Based on the numbers, it would seem Australians were more than adequately insured. 

Only half of Australians hold life insurance
However, as part of commissioned research in 2015, respondents told TAL that despite the significant number of active life insurance policies, only 52% of them hold some form of life insurance.

The study also found only 30%-37% of Australians aged 18-69 held life insurance. And only 11-18% held disability cover, income protection insurance, or critical illness and trauma cover. 

Double-ups through super
So how can there be so many life insurance policies but so few Australians with cover? Well, most life insurance policies (14 million or 63%) in Australia are held through superannuation, the 2018 federal parliamentary report states.

And many Australians have multiple super accounts. In fact, 39% of Australians have more than one super account, and 14% have three or more accounts, according to the ATO.

What that means is that many of the 22 million Australian life insurance policies are held by people with multiple policies. 

Under-insurance
As revealed in the commissioned research mentioned above, of the 52% of Australians who do hold life insurance, many are underinsured.

A summary by Vanguard Investments of the key points covered in Rice Warner’s Underinsurance in Australia 2017 report shows that if Australian families had to call on their life insurance policy, half of them would find only 47% of their family’s basic needs, or 28% of the amount required to maintain their family’s standard of living, was covered.

Even more concerning: the median level of income protection would only meet 21% of needs. That figure drops to 14% for the average total permanent disability cover. 

Life Insurance – at any age
Life insurance can be tailored to suit each Australian life. 

That can mean considering your age, life stage, leisure pursuits and life goals. It can also consider the amount of debt you carry (including property), the number of dependents you have, your current earnings and the life you envision for you and your family. 



Labels

Labels:
Location: level 4/33 Remora Rd, Hamilton QLD 4007, Australia

Comments

Post a Comment

Popular posts from this blog

Times are tough. How can you position yourself to minimise the impact?

The last few weeks have been extraordinary to say the least. We’re battling a world wide health crisis and we face uncertainty in many aspects of our lives.  It’s true that there are simply some things beyond our control and we will more than likely see many changes to our everyday lives for the remainder of 2020 and beyond. So, what can be done?  On the other side of this, many people will be left with dramatic financial stress, whether it be periods of unemployment, depleted cash reserves or battered superannuation balances.  And for many, timing will be an issue. Those who were weeks ago contemplating retirement may now need to change their plans. And those that are still accumulating for retirement have more than likely just seen their investments and superannuation return to levels of 5 or 6 years ago. Essentially the clock has be wound back in one way or another.  It may well be a good time to take stock and lay some foundations for when thing...
Post a Comment
Read more

Does one size fit all when it comes to Superannuation?

Super Choice – how can employers help their employees? Since 1 July 2005, most employers have been required to give their employees a choice of fund for their superannuation guarantee contributions. It is only if the employee fails to choose, or chooses a fund which cannot be used by the employer, that the employer will be able to choose the fund. Prior to this, employees essentially didn’t have a choice and they were basically stuck with the fund their employer chose for them. In the past decade since “Super Choice” was introduced, there has been a great deal of competition in the superannuation market given that employees can choose where to put their money. A competitive market is good for consumers with an almost limitless choice of highly developed options for employees to choose from. So, what does this mean for employers? Well, in the early stages of this change it was essentially an administrative burden as large companies with large numbers of staff were faced with p...
Post a Comment
Read more

Don't Wait till you're in your 60's to see a Financial Adviser

Ask most 30-year old’s who their financial planner is and the typical response might be ‘huh?’ After all, financial advisers are for older people with plenty of money to invest, aren’t they? Well, yes, people nearing or in retirement will benefit from sound advice. But so will younger people. With the benefit of having time on their side, and with some help from an adviser, a 30-something can easily establish a wealth creation plan that can deliver a big payoff in the future. Harness compound interest It’s been called the most powerful force in the universe, and compounding returns – earning interest on your interest – can deliver dramatic results. Imagine that, at age 30, you commence a simple savings plan. You contribute $2,000 each year to an investment that delivers an after-tax return of 6% pa. After 30 years you will have contributed a total of $60,000, but your investment will be worth $158,116. The magic of compound interest will have delivered you an effortles...
Post a Comment
Read more