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Australians are under the misconception that they don’t need life insurance; either because they don’t have children, they have health insurance or they think the Government will look after their family if they die.

These are common myths around life insurance, according to on-going research by specialist life insurer TAL.

TAL polled more than 1200 people and said the top reason why the main breadwinner didn’t hold life insurance was because they couldn’t afford (47%). This was followed with 18% claiming they had no immediate family to protect, and 17% saying they could get the same level of cover from their private health insurance policy.

Table 1: Main reasons for main income earners not to take out life insurance:

Not enough money / too expensive


No immediate family to protect


A belief that health insurance provides the same insurance cover


Other assets that can be used in the event of death


Consider life insurance unimportant


Has not occurred to take out life insurance


Currently healthy and expect to live a long life



TAL Group CEO Jim Minto says the top reason is a major cause for concern because life insurance is not only affordable but provides vital support for a person’s main asset: their ability to earn an income.

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  • Innocent Observer on 15/05/2013 3:15:20 PM

    I think my point was missed. Mushroom was talking about life insurance. For some people there is not the need. When we discuss insurance with our clients we start with the need, then work back from there. If there is a gap to be filled, usually insurance is the cheapest way to plug it. Insurance is a risk management tool (nothing more, nothing less). We don't go out with the intention on claiming. And when we do have claims we refer back to our recommendations and use it for what it's intended for

  • Brett on 15/05/2013 12:13:32 PM

    ...a terminal illness benefit allows you to have options while still alive.

  • Brett on 15/05/2013 12:12:19 PM

    Mushroom, what if you can't work because of illness or injury? Are you happy trying to qualify for Centrelink's disability support pension and live on this alone to still "live" the lifestyle you want? How will you pay for any mortgage you might have? How will you pay rent and still save for holidays and going out (let's face it, just because your health or injury stops you from working doesn't mean you don't want to still enjoy your helps with this!)

  • Angelo on 15/05/2013 10:34:21 AM

    Almost 1 in 5 think Health Insurance is the same as Life Insurance! Madness!

  • Rod on 15/05/2013 10:02:39 AM

    It is simple , " To have it when you want it , you have to Buy it when you dont" Fact is people do not que up to buy life insurance, it has to be sold , It wont happen to me is also part of the problem, but the fact of life is it does. Once again we deal with all of the compliance because you have advised someone to purchase a couple of million dollars of life cover and then generate 50x pages of paper to justify why ,,

  • Jeff M on 14/05/2013 2:01:13 PM

    Basically its like this, if I complete and will or take out life insurance it means I am admitting I may die one day and thats a thing I do not want to think about. I sold Insurance for a few years the the above is more the reality so how do you get them past acknowledging the fact yes you may die so you had better protect the innocent in your life, before you do.

  • Grant on 14/05/2013 12:27:20 PM

    Innocent Observer, you have missed Rob's point. There is never a better time to buy Life Insurance than now. If the "need" is 10 years down the track, you can't gaurantee that youyr health at that time will allow you to buy Insurance when you want it.Lock in level premium when you are young and Healthy, and obtain a policy that will automatically allow you to increase cover on certain events like marriage, birth of Children etc. You then have the best of both worlds, locked in cheaper rates and gauranteed insurability.

  • Innocent Observer on 14/05/2013 10:55:05 AM

    Rob, Mushroom makes a very valid point.

    Sure, everyone's circumstances change along the way (marriage, kids etc), but until then there is not necessarily the "need" for insurance. For most families marriage & kids are planned events, so there's plenty of time to get everything order.

    At the end of the day it comes down to whether the insurance is there for a (quantifiable) need, or for some other warm & fuzzy feeling. There's not always the need.

    (Also for the dude in Mushroom's example set his cover up through super, then chances are the ATO would have first dig at it)

  • Rob Coulson on 14/05/2013 10:23:11 AM

    Simple, because within a short period of time you may become married and have kids. If you do not get Life Insurance whilst you are young and healthy, by the time you do realise you require it you may be uninsurable. Insurance is also quite inexpensive whilst you are young. I bet you insure your house and your car and don't give it a thought. Your most valuable asset is your ability to earn an Income!!! You should consider purchasing Income Protection and give consideration to some life cover. You can get your life cover through your Super to make it Tax deductible.

  • mushroom on 14/05/2013 9:25:25 AM

    So why does a single person with no dependents need life insurance?

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