Life Insurer TAL has released their second annual Australian Financial Protection Index, which revealed there has been an increase in the protection levels of Australians.
The index, which was developed last year by TAL together with Galaxy Research, is based on a survey of 1,266 Australians aged 18-69 and helps to track and analyse the views of underinsurance across life insurance industry including: Life Cover, Critical Illness or Trauma Cover, Total and Permanent Disablement Cover and income protection.
The index is scored 1 – 100 with 1 being the lowest score and 100 being the highest score.
This year’s results show an increase of 37% in the overall national index score, from 24.2 in 2014 to 33.5 in 2014, meaning Australians have taken much more of an interest in life insurance over the past year.
The highest index scores of around 40 out of 100 were recorded by the following groups:
- Generation X (aged 35-49)
- Higher income earners
- Those with children
- Those with mortgages
- Risk takers
The lowest index scores were recorded by the following groups:
- Gen Y (18-24)
- Earning less than $40,000 per year
- Not working
Russell Cain of life insurance comparison website xlife.com.au said the results were encouraging and reflected the changes that had been made in the industry in recent years.
“It’s widely acknowledged we have an underinsurance problem in Australia so it’s great to see more people taking an interest in life insurance and making sure their families are financially protected,” Mr Cain said.
Changes that have been made in the industry in recent years include increasing the flexibility to own your insurance policy through your super fund which has led to flexible policy options to own combined policies inside and outside of super and other product enhancements designed to give consumers more benefits.
Mr Cain also said the results reflected the types of clients they were seeing.
“Typically our clients are married, own a home and have children or are looking to get married, purchase their first home or start a family so we can certainly understand why these groups have higher index scores,” Mr Cain said.
“The challenge for all of us in the industry is helping Australians increase their level of financial protection as affordably as possible”.
Source: ‘Australians appetite for life insurance on the rise’ – TAL, June 25 2014