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Life Insurance Myths – TAL Survey

One of Australia’s largest life insurance companies TAL has released the findings of a study into some of the more common life insurance myths.

The survey of 1,260 Australians aged 18-69, was designed to find out the reasons why some people did not take out some form of life insurance.

The top five reasons given were:

  1. Not enough money/too expensive – 47%
  2. No immediate family to protect – 17%
  3. Health insurance provides the same insurance cover – 17%
  4. Other assets can be used – 13%
  5. Had not occurred to take out life insurance – 12%

It was also found that 15% of men compared to 3% of women believed their plans for a long and healthy life reduced their need for life insurance while 19% of men compared to 14% of women believed health insurance offered same benefits as life insurance.

Life Insurance Myths

Other results found:

  • 33% of those aged 18-24 felt life insurance was not needed as they expected to live a long and healthy life.
  • 33% of those aged 18-24 thought that health insurance covered them for life insurance.
  • 29% of those aged 18-24 also felt that it was not needed as they had no immediate family to protect or they hadn’t really thought about taking out life insurance.

Main reasons for not taking out life insurance:

Not enough money or too expensive 47%
Did not have any immediate family 18%
Believed health insurance provides same benefit as life insurance 17%
Other assets can be used in case of death 16%
Don’t think life insurance is important 13%
Has not occurred to them to take out life insurance 12%
Healthy and expect to live a long life 11%
Life insurance is too complicated and it is too difficult to understand 8%
Don’t believe in insurance 6%
Extended family who would provide financial 4%
Expecting inheritance 3%
Expecting support from government 3%
Don’t know/no reason 13%

 

Results of survey by state:

NSW VIC/TAS QLD SA WA
Too expensive 49% 36% 57% 46% 49%
No immediate family to protect 20% 13% 21% 15% 19%
Health insurance 14% 18% 23% 14% 18%
Sufficient Superannuation 19% 18% 13% 10% 13%
I have assets that can be used 17% 14% 20% 12% 13%
Life Insurance is not important 11% 15% 15% 14% 13%
I’m healthy and expect to live a long life 16% 8% 11% 2% 7%

 

Results of survey by age:

18 – 24 25 – 34 35 – 49 50+
Too expensive 50% 49% 49% 44%
Health and expect to live long life 34% 23% 7% 4%
Private health insurance 34% 12% 9% 22%
Haven’t thought about it 29% 17% 13% 5%
I have assets which can be used 24% 10% 11% 21%
It’s not important 14% 19% 16% 9%
No immediate family that is needed to protection 29% 25% 10% 17%
It’s too complicated 12% 13% 11% 3%
I have sufficient superannuation 23% 8% 6% 25%

 

Russell Cain, CEO of insurance comparison service xLife said that the results reflect a lot of the misinformation that exists in the industry.

“Life insurance companies have taken tremendous steps to not only educate the public about the benefits of insurance, but they have also taken steps to try and make life insurance more affordable,” Mr Cain said.

“In recent years, insurers have introduced greater flexibility when it comes to payment structuring including stepped, level and hybrid premium (blended premium) options, the introduction of splitting of TPD ownership between personal ownership and superannuation ownership, multi-policy discounts and packaged discounts for families and couples.”

Mr Cain said it was important that people never made assumptions about life insurance and always speak to a financial adviser.

“We have specially trained advisers who can help you not only understand life insurance more but they can also advise you on what your best options are.”

For more information on life insurance policies, please contact xLife on 1300 135 205.

Source: TAL Press Release, 13 May 2013

About Russell Cain

Russell Cain(Can be on found on Google +) is the CEO of xLife Pty Ltd, an award winning life insurance comparison service which incorporates the Life Insurance Direct and xLife brands. He has over 10 years experience in the accounting and finance industry as well as over 15 years experience in running small business. It was in 2005 when running one of these small businesses that xLife first materialised as Russell realised the importance of sound financial advice, high level of customer service and the important of openness and transparency with customers. In his spare time, Russell is an avid property investor and home renovator, enjoys cycling and playing squash and also participates in an entrepreneurial mentoring program where he currently helps mentor small business owners to help achieve their goals.