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:
- Not enough money/too expensive – 47%
- No immediate family to protect – 17%
- Health insurance provides the same insurance cover – 17%
- Other assets can be used – 13%
- 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.
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 support from government||3%|
|Don’t know/no reason||13%|
Results of survey by state:
|No immediate family to protect||20%||13%||21%||15%||19%|
|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+|
|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