Who’s buying risk advice?

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If you’re looking to tap into the underinsured market in Australia then new research can give you some insight into who’s interested in insurance and how you might target them.

While only 31% of baby boomers (aged 50 to 65) have reported having at least one form of life space insurance (a collective term for life, disability, income protection, and critical illness/trauma insurance), 43% of their Gen Y children (aged 25 to 34) said they did, in the latest research from TAL.

TAL managing director Jim Minto believes that rather than meaning Gen Y were more insured than their parents, the results showed that they were just more aware of their coverage. And this could mean that advisers can look forward to more consumers shopping for the right coverage.

Percentage of Australians who say they have life space insurance:

Age group

Life space

Life

Disability

Income protection

Critical illness and trauma

18 to 24

25%

18%

5%

11%

9%

25 to 34

43%

34%

10%

23%

14%

35 to 49

44%

35%

16%

22%

16%

50 to 69

31%

27%

8%

12%

6%

LifeInsuranceFinder.com.au found that consumers became more active in seeking out life insurance cover after the shocking death of a family member or friend. Fifty percent of Australians said they would seek cover in this instance, with only 23% being influenced by marriage or the birth of their first child. Advisers should also be talking with consumers taking out a new mortgage, as 35% said they would consider cover – again, more than those having a child.

Five starting points you can use to sell insurance are:

  1. Getting married: Life cover can ensure that spouses will not suffer any financial hardship if one party were to die.
  2. Having children: Australians should consider the various expenses that may arise while children are still dependent, including food, clothes, education and renovations. It is important to review the current level of cover as the family grows, to ensure an adequate level of cover is in place and loved ones are not left in the lurch if a death occurs.
  3. New home or mortgage: A first home purchase is often the biggest financial commitment a person will have. As such, it is crucial to ensure the right cover is in place so that friends and family are not left under financial strain.
  4. But I’m single with no kids?: Australians may still want to consider cover for any debt accumulated or to cover funeral expenses so they are not passed onto family. It may be necessary to consider Trauma Cover or Income Protection to have a financial safety net in place if forced out of work due to serious illness or injury.
  5. The earlier the better: It’s worth considering taking out cover earlier in life to take advantage of more competitive premiums. Life insurers will assess the applicant’s health during application, so it is ideal to take out cover when in good health.

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