One in two believe life insurance is a waste

Almost half of Australians believe life insurance is a “waste of money” according to a new Commonwealth Bank survey that found less than one in three adults have a personal life insurance policy.

The survey, commissioned by the bank’s insurance arm CommInsure, found 49 per cent of respondents who did not have life insurance said it was a “waste of money”, while 57 per cent figured they simply just did not need it.

Of the two thirds of Australians with some life insurance, 80 per cent believe they are adequately or more than adequately covered, but CommInsure managing director Peter Beck said this unlikely to be the case.

“Many people think that their life insurance needs are covered under compulsory super but unfortunately very few insurance policies provided with compulsory superannuation provide adequate cover in the event of a serious accident or death,” Beck said.

The survey, conducted by NewsPoll on behalf of CommInsure and which involved 914 respondents, also found women were much more likely to be under-insured.

Of the one third of Australian adults who reported to have no life insurance, 62 per cent are females compared with 38 per cent males.

“The standard amount of insurance cover held by most people through their super fund is estimated to be between $100,000-$150,000, which is the equivalent to two to three times the average salary, when in fact the industry guideline is that most people need about 10 times their salary,” Beck said.

Beck said people don’t like to think about their own demise or disablement, but this was no excuse for underinsurance.

The survey found that many Australians are likely to start thinking about getting life insurance when they are triggered by a friend’s illness or injury, or a major life change.

“Australians need to be aware of the huge role that life insurance can play in helping provide for family and loved ones in the event of death or disability,” Beck said.