Third of Aussie families unprotected due to high life insurance costs
While over 80% of Australian parents are worried about protecting their families in the event of death or injury, more than a third are opting out of acquiring life insurance because of high prices according to the Real Insurance Family Protection survey.
The major factors for not taking out cover were an inability to afford life insurance (59.2%) and uncertainty as to whether it was worth it (25.7%), the survey found.
Also one of the top turn offs for parents was a lack of understanding about how policies worked, as only 56% suggested they had a good or excellent understanding of the insurance options available to them, while 30% said they had a basic understanding and 13% had no understanding at all.
ASIC’s recent review of the life insurance industry found that there were often discrepancies between definitions used by different insurers which, coupled with a lack of claims data, made it difficult for consumers to compare policies. In response to this ASIC and fellow regulator APRA announced a collaborative project last week in an attempt to make it easier for consumers to compare and comprehend life insurance policies.
Nearly one in eight parents surveyed suggested that they had personally experienced financial hardship after a loved one had passed away with insufficient or no life insurance, which may have been motivation for purchasing cover of their own.
Over 90% of respondents with cover said that it provided them with at least some peace of mind, especially in the event of their death.
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