Single-person households, and younger generations have increased life insurance cover in today’s uncertain times, according to the TAL Financial Protection Index.
The index studies perceptions of insurance held, and cover adequacy. With a scale from 0 - 100, the latter score indicates the households have each of the four forms of life insurance, with adequate cover.
In the 18 - 24 age group the index has risen 2.5 points on last year, reaching 22 on the scale, while the 25 - 34 age group has moved to 29 from 27.4.
Gen Y on the whole has also increased to 26.4 index points, from 24.5 last year with former TAL Group CEO Jim Minto speculating that uncertainty in the workplace may be behind this uptake.
“It may be that, in a more risk-sensitive climate, they are looking to various life insurance options that can support them across various personal risk situations, so they can continue paying their debts and plans and dreams for the future.”
Both single-person and equal-earner households also improved to 32 points, from 31 in last year’s index, and there is speculation that increased concern about downturns in the economy and the impact of redundancy is behind this increase. Mr Minto states
“With single-person households on the rise, we may well continue to see an upward trend in this group recognising the value they see in life insurance to protect them.
“They may perhaps be increasingly aware that they only have themselves to rely on, and losing their job or experiencing injury will have a huge impact on rent, mortgage repayments and other commitments.”
On the other side of the coin, higher-earning households have decreased their level off cover in recent times, with those bringing in greater than $90,000 a year down two points to 40 on the index this year. Likewise households with incomes between $40,000 to $90,000 have also decreased cover, dropping to 27 points from 29 in the previous index.
With younger generations of Australia planning carefully for their futures, Mr Minto believes that “increased uptake of life protection among younger generations is heartening”. Here at Rate Detective we can’t help but agree.