Australian households still at risk of underinsurance, survey reveals

by Julia Corderoy18 Mar 2015
Home owners are more likely to have adequate life and income insurance, although the latest survey reveals Australians are still underinsured.

The annual TAL Australian Financial Protection Index remained relatively steady overall from last year, dropping slightly from 33.5 to 31.6. Home owners recorded a higher than average index score of 35, although the proportion of home owners with adequate insurance did decline from last year, with the index dropping 5 index points from 2014.  

According to TAL Group CEO Jim Minto, home owners are more likely to have adequate insurance because of their increased awareness of the wide-reaching ramifications of loss of income due to illness, injury or death.

The survey also revealed a “heartening” increase in the insurance appetite of Generation Y. Minto says this may be a result of a number of Gen Ys entering the workforce at a time when post-GFC still permeated our culture, revealing an encouraging and sensible approach to risk.

“It may be that, in a more risk sensitive climate, they are looking to various life insurance options that can support them across various personal risk situations so that they can continue paying their debts and plans and dreams for the future,” he said.

However, Minto warns that the national level of insurance is still alarming. 

“Clearly we still have a way to go before Australians understand that life insurance is a highly effective way of protecting assets such as the family home, covering other debts – including credit card debt – as well as safeguarding aspirations such as lifestyle and extra supports for children including education.

“Financial protection has an integral role to play in the life of virtually every Australian but as a nation we have much work to do to better inform people and close the protection gap.”