Mothers need to lift their level of life insurance cover, but most believe it is too expensive to do so, according to research conducted by TNS Australia on behalf of the Investment and Financial Services Association (IFSA).
The survey showed 48 per cent of mothers employed on a full-time basis cited expense as the major restraint to adequate life insurance cover, despite the fact that women with dependants placed a greater importance on the need for life insurance when compared to their male counterparts.
IFSA chief executive Richard Gilbert said the findings reflect a combination of poor communication on behalf of the insurance industry about the importance of adequate life cover and consumer complacency based on a mistaken belief that the basic coverage provided by super funds is sufficient.
Other results highlighted by the study were that 50 per cent of working mothers held life insurance, as opposed to 62 per cent of working fathers, and 20 per cent of full-time working women had enough insurance to cover their annual income for only three years or more.
Gilbert said people’s emphasis on housing and mortgages have caused them to ignore risk protection. He said investment markets had also taken up some of the funds usually allocated to insurance.
However, he said the industry is beginning to address the issue, with a noticeable increase in the number of advertising campaigns emphasising the need for good risk protection from the major insurance houses.
Other educational initiatives are also underway.
“I think the Financial Literacy Taskforce will play a role here…when that material starts rolling out I think there will be a risk protection element,” Gilbert added.
IFSA intends to play an active role in the education process as well.
“Our active engagement will not be through advertising but through publication of balanced independent research on the issue, so the media have information to communicate to their audience,” Gilbert said.
