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Majority of Aussies still underinsured
Three out of ten Australians have no form of personal insurance according to TAL's Australian Financial Protection Index.
Most Australians believe they do not have enough life insurance despite a growing recognition of the country's underinsurance problem, the survey found.
On average, Australians scored 24 out of 100 where 100 indicated that people had each form of life insurance; life, illness, disability and income protection, and at adequate levels of cover.
"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.
"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," said TAL managing director, Jim Minto.
One out of four respondents scored between 30 and 70 and only 8 per cent recorded a score of over 70.
Certain demographics scored higher including GEN Xers and those with mortgages and children, according to TAL.
Renters scored only half the score of those with mortgages while those with no children scored 23 compared to those with children under 18 years' who scored 27.
"It seems there is a greater appreciation of the value of life insurance among those with the most to lose, particularly people with mortgaged assets.
"But even among these groups, penetration is still low and they are only relatively better off compared to the average score," he said.
Minto said that although awareness of Australia's underinsurance problem was increasing, the index demonstrated the industry still had a ways to go.
"It is hoped that greater awareness of life insurance and the strengthening of the provision of life insurance products within superannuation funds, along with the life industry's own education efforts through Lifewise and other initiatives, will continue to help close the financial protection gap in Australia," said Minto.
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