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Study reveals life insurance myths

TAL is calling for education on the benefits of life insurance, after a study revealed there is confusion between the different insurance options available and their relevance to financial security.

After polling 1,200 people in a study questioning why they do not have some form of life cover, TAL found 47 per cent of people living in households in which the main breadwinner doesn’t hold life insurance claim they cannot afford to take out some form of personal cover.

In addition, among the top reasons a household’s main income earner doesn’t have life insurance is the belief that life insurance is redundant if a person has assets that can be drawn on in the event of death, according to TAL.

A further one in five people claimed they didn’t need life insurance because they had no immediate family to protect, while 17 per cent of people felt they could get the same level of cover from their private health insurance policy.

“Life insurance is essential, not a luxury that people should let go of easily. Being unable to earn an income can have life-long and devastating consequences for Australians, their dependents and families,” said TAL Group chief executive officer Jim Minto.

More than three times as many men as women believe their plans for a long and healthy life reduce the need for life insurance, according to the TAL study.

“This tendency for men to think they are immune from health risks is tempered by women who tend to be far more realistic about health issues and the related risks,” TAL said.