More than two-thirds of Australian workers are concerned that cost of living pressures will impact their ability to afford life insurance in the future, according to a new report.
“Australia’s safety nets are stretched far too thin, and people are increasingly worried about falling through the cracks. Life insurers have a critical role to play to ensure that doesn’t happen,” said Council of Australian Life Insurers (CALI) CEO Christine Cupitt in a statement on the publication of the inaugural State of Australia’s Safety Net report.
The report, commissioned by CALI, looked into the lives of more than 5,000 Australian workers and showed the financial advice needs of young people (18-34 years), women and those in their mid-career (35-54 years) were not being met. The research investigated the link between life insurance and the personal and financial well-being of Australian workers.
“We have an advice accessibility crisis in this country. In the past three months alone, almost a third of Australians considered seeking financial advice on life insurance, but just 8% actually received it,” said Ms Cupitt.
“This report shows that rising cost of living, increasing mental health challenges, and global economic shocks are putting intense pressure on Australians. They need someone to talk to about their financial future now more than ever,” she said.
The research was conducted independently by the agency 89 Degrees East and led by one of Australia’s most respected social researchers, Dr Rebecca Huntley.
“Higher living costs and the uncertain economic environment have led to increased stress levels and concern about mental health in our community,” said Dr Huntley.
Life insurers are the largest provider of financial support for people experiencing mental health concerns, second only to the Federal Government.
Almost 90% of Australians think it’s important that they are able to access financial support through their life insurer in the event of mental health challenges that mean they are unable to work. Despite this, only a third would turn to their life insurer for help in this situation. Most workers are more likely to ask family and friends for help or seek government assistance payments instead.
Last year, more than 91,000 Australians or their loved ones received more than A$12bn ($7.9bn) in financial support from life insurers. Even so, there remains a growing underinsurance problem that is leaving more than 3m people with inadequate protection when times get tough.