3 in 5 Australians now hold some form of life insurance: Report

The 2025 Life Insurance Pulse report from Australian life insurer NobleOak has revealed that 60 per cent of Australians now hold some form of life insurance or income protection, a notable increase from 55 per cent last year and approximately 51 per cent in the prior three years.

As Australians increasingly recognise the value of life insurance, the report revealed that 23 per cent of active policy holders believe they “don’t have enough cover for their needs”, up from 18 per cent last year.

While recent research has indicated that some Australians have been forced to cancel their life insurance policies due to cost-of-living pressures, NobleOak found that many are now choosing to reduce costs in other areas in order to maintain their cover.

“The fear of not having enough life insurance could stem from an increasing anxiety about keeping family members protected financially due to an increasing cost of living and inflation pressure,” the report said.

In spite of the ongoing financial pressures among Australian households, 76 per cent report feeling in control of their personal finances, up from 65 per cent in 2023.

NobleOak director and chief executive Anthony Brown said the findings suggest a significant shift for Australians as they focus on providing security for their families through life insurance.

“This year’s report found life insurance has now become a priority purchase for many Australians, outranking education, mobile phone use, some grocery purchases, and gym memberships and holidays,” Brown said.

While these findings paint a positive picture for the country, the report found that some Australians seem to lack a comprehensive understanding of key life insurance terminology.

For example, 41 per cent of Australians said they were unfamiliar with the term “fully underwritten”, with young people in particular making up half this group.

Among those who were familiar with the term, nearly all considered a fully underwritten policy to be at least somewhat important, with many suggesting that they would opt for the security that comes with undergoing this process rather than the potential benefits of faster processing that come with a partially underwritten policy.

Brown added that the apparent knowledge gap for Australians is “worrying” but suggested that it also presents an opportunity for advisers to educate their clients on the value and peace of mind that comes with a fully underwritten policy.

On a slightly more positive note, the report found that use of financial advisers and brokers has increased to 32 per cent, coming back to pre-COVID-19 levels, though the large majority of respondents (68 per cent) still don’t utilise a financial adviser at all.

However, the report also noted that Australians are primarily accessing these services for superannuation, retirement planning and investment advice, and not for life insurance.

Another positive finding is that happiness levels have risen to a record high since NobleOak started conducting this research, with the average happiness rating for Australians reaching 7.3 out of 10, a notable increase from the 6.5 low of 2021.

Furthermore, more than one in five (22 per cent) reported a perceived happiness rating of nine out of 10, compared with 17 per cent in 2023.

Unsurprisingly, the report noted a strong correlation between happiness levels and health ratings, with 59 per cent of respondents indicating that they were relatively or very healthy, up from 55 per cent in 2023.

Those who selected a four or five out of five on their health rating had a higher average happiness score, coming in at 7.7 out of 10.