Australians don’t have nearly enough personal life insurance despite a marked increase in the number of people having some cover through their superannuation.
In order to test the widely held perception that Australians are underinsured, the TAL Australian Financial Protection Index calculated a national score out of 100 to measure financial protection.
The results suggest that the 1200 people polled believe they don’t have enough of each form of personal life insurance: life, illness, disability and income protection.
Through Galaxy Research, TAL questioned Australians 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.
What’s in the scores
The results were modelled to calculate a score from 0 to 100, with 100 indicating that people have each form of life insurance and believe they have adequate coverage.
The inaugural TAL Australian Financial Protection Index calculated a national score of 24.2. “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,” said Jim Minto, TAL managing director.
“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.”
The perception-based index is higher among certain demographics, such as those with mortgages and children, indicating a higher level of awareness among those groups.
In addition to state differences, the index indicates that take-up and awareness of life insurance among generational groups is highest in Gen X, those aged 34 to 49 years, while some people have no coverage at all and others indicating a fuller level of protection, scoring an index figure of over 70.
Of more concern are the three in 10 polled (30 per cent) who recorded a score of zero, indicating they do not have any personal insurance.
“What we are finding from the TAL Australian Financial Protection Index is that some people report having either all or most forms of life insurance, while others have just some cover and others none at all,” said Minto.
“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.”
New risk-specialist dealer group Affinia expands
In related news, TAL’s new risk-specialist dealer group, Affinia, has hired three regional managers to help drive the group’s ambitious growth plans.
Jonathon Nguyen has joined the team as Affinia’s regional manager for Victoria, Tasmania, South Australia and Western Australia. He was previously state manager, Western Australia, for Millennium 3.
Peter Nielsen is regional manager for New South Wales and Australian Capital Territory, having joined Affinia from a similar role at Professional Investment Services.
Completing the line-up, Paul Gaffney joins as regional manager for Queensland and Northern Territory. He was previously state manager of dealer groups in Queensland for BT.
They will report to Affinia head, Craig Parker. “Affinia has big plans for 2013 and beyond,” he said. “We want to be the number one choice for advisers specialising in risk insurance, and are already seeing a lot of interest from the market.”
