Thirty per cent may lack private insurance
Up to 30 per cent of Australians may have no personal insurance, according to new research released today by major insurer TAL.
The research, the TAL Australian Financial Protection Index, also confirmed the continuing high levels of under-insurance in Australia.
However the index suggested that many Australians recognised they were inadequately insured and believed they needed better cover.
The index was compiled via research undertaken by Galaxy Research via which TAL questioned more than 1200 people on the types of life insurance they held, as well as if they felt they had enough cover if they or their partner could no longer work.
According to TAL, the results were modeled to calculate a score from 0 to 100, where 100 indicates that people have each form of life insurance and that they believe they have adequate coverage.
The inaugural index calculated a national score of 24.2, prompting TAL managing director, Jim Minto to express surprise.
“The take-up of life insurance over recent years has increased markedly through superannuation, so we were surprised that the national index score was just 24 out of 100,” he said.
“While most Australians have some form of life insurance through super, some people are simply not aware of it, while many do not know if the types and level of life insurance cover they have are adequate.”
Minto said the index data suggested more work was needed in terms of addressing Australia’s under-insurance problem.
Hardly surprisingly, the index suggested that the need for insurance was most recognised by those who had most to lose.
Recommended for you
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.
