Life insurance proves last resort across age spectrum
An alarmingly low proportion of Australians say they would use a pay increase to take out financial protection, a TAL survey shows.
While more than 50 per cent in each age range said they would use the money to build up savings, less than 10 per cent across the age spectrum said they would use the money to buy life insurance or increase their cover level.
"This survey reveals the very low priority people place in thinking about using extra income to ensure they have adequate financial protection. It is a massive challenge but we need to change this mindset," TAL Group CEO Jim Minto said.
However, Minto said it was encouraging that most Australians would use the pay increase to "deleverage".
"The global financial crisis marked a turning point in consumer attitudes towards savings and debt, and deleveraging became an important priority. What we are seeing from this research is that this trend continues."
The research showed 59 per cent would try to build up savings, 38 per cent would put the money into their mortgage, 30 per cent would pay off their credit card or personal loan and 28 per cent would use it for bills.
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Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
