Gen Y actually care about life insurance
Not a headline you'd expect to see, but young Australians are actually engaging with life insurance products at a higher rate than older generations. According to new consumer research findings.
Australians specialist life insurer TAL has recently undertaken research to better understand consumer behaviour towards financial protection and planning attitudes. It turns out that word of mouth is still the best seller.
According to the report one in five people (20%) on the national polls said they had heard of a friend or family member who had suffered an injury, illness, disability or even death but where life insurance had saved them and their family from financial hardship as a result.
The biggest motivation for obtaining financial protection was after hearing a story of a friend or family member who had been protected by taking out life cover.
In cases where people already had life insurance, the number of those who had heard of these safety net stories rose to one in three (or 33%), indicating the positive experience that life insurance performed can be very motivating to obtain financial protection.
In a separate question about the actual reasons for taking out life insurance, the primary reason given by most (39% of respondents) was that they made their own independent decision, unprompted.
"The very high level of unprompted actions being taken by people (39%) is a surprise when so often people talk about low interest or engagement in life insurance." Says TAL Group CEO Jim Minto "The results also show that stories of how life cover has protected someone they know from financial hardship due to illness or accident can be a real motivator in ensuring they themselves obtain cover."
The second main reason was because life cover was already part of their superannuation (32%) followed by being prompted by a family discussion (22%), or a financial adviser (19%)
"I am actually not surprised one in five people have heard of a story how life insurance has saved a family from financial hardship in a time of need."
Interestingly, Generation Y (specifically those Australians under the age of 25 years) is far more likely to be independently initiating the decision at 48% of that cohort, compared to the average of 39% across all generations.
The research found that while almost one in five (19%) were prompted by an adviser or financial planner to consider their life cover requirements, that figure rises to 26% among Gen Y, compared to just 14% for Gen X and 17% for baby boomers.
"These results reveal that more of our youngest adults are 'making their own decision' to take out life insurance at a higher rate than older generations, which shows they are more engaged in their financial affairs than they have been given credit for in the past," Mr Minto said.
"Younger generations are using technology to take matters into their own hands to seek out services and products to meet their needs."
While life insurance often only becomes a topic of barbecue conversation when there is a personal connection to a story of someone falling on hard times, financial protection should not be seen as a taboo topic. Life insurance is delivering all time record benefit payments to Australians.
"Let's face it, life insurance has traditionally been something many people would rather not think about, even though they should. Hearing how life insurance can help financially in a time of need is a compelling reason to ensure protection is in place," Mr Minto said.
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