Risk insurance non-existent in majority’s mind set
Exacerbating Australia’s insurance gap sting, new research has revealed only 14 per cent of individuals view risk insurance as a coping mechanism for when life has dealt them a bad hand.
Tower commissioned the investigation, which surveyed 809 people and called upon internal and external participants via an online survey conducted by an independent researcher.
Its aims were to discover what the public’s major health concerns were and how people would cope financially if they were to suffer a serious illness or disability.
Respondents were chosen from six life stage categories spanning adulthood, and examined the views of an equal number of male and female participants.
Upon reviewing the findings any assumptions were quickly ruled out or, as Tower national marketing and communications manager Jodi Murray explained, “we were blown away with the results”.
She added: “The really scary finding involved how people said they would cope if something major happened regarding their health.
“The coping mechanisms cited by most respondents were government assistance (40 per cent) and private health cover (36 per cent), which does not provide income protection.
“We found that there is a huge problem out there, with people’s mind set on what’s going to help them.
“About 24 per cent responded that they were unsure of what to rely on.
“There is a massive disconnect between the protection a consumer thinks they have, and the reality of the situation being that they actually don’t have enough.”
Across all six life stage categories, the top five health concerns were cancer, heart attack, sight loss, stroke and dementia.
Family history and lifestyle were provided as the main reasons behind these concerns.
Tower is using the results to educate advisers on effective ways of selling life insurance.
“Many advisers don’t know how to sell life insurance to people outside their own demographic, for example, they don’t know how to connect with young singles,” Murray said.
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.
