Interest rate pressure compounds insurance gap

Interest rate pressure compounds insurance gap

8 November, 2007

- Allianz urges Australians to spend $1.14 a day for interest rate peace of mind –

Allianz Australia, part of one of the world’s largest insurers, today urged Australian families to ensure they have some insurance protection in the wake of the latest interest rate rise.

“Despite the recent interest rate hike, it would only cost a typical working couple1 $1.14 per day to make sure – whatever official interest rates are – that their family home is protected against the possibility of a breadwinner dying. (see notes)

“The latest rate rise will place additional financial strain of up to $480 a year on a family with a $250,000 mortgage. These higher repayments along with the growing cost of living will stretch many people financially,” said Jonathan Poole, CEO of Allianz Australia Life Insurance.

“At a minimum, people with dependents should look to secure the family home. For a couple1 with a mortgage of $250,000 it would cost as little as $34.13 per month with Allianz to secure enough life insurance cover on both partners to ensure the mortgage can be paid off in the event of one person’s death. That’s less than most people spend on Pay TV. (see notes)

We know more than four in ten white collar workers (professionals, business owners and self employed people)2 don’t have any life insurance at all. This suggests this group of Australians would be unable to take care of their family’s living expenses if something happened to them,” said Jonathan Poole, Chief Executive Officer of Allianz Australia Life Insurance.

Research commissioned by The Investment and Financial Services Association (IFSA), recommends people seek cover that provides at least 10 times their annual income in the event of death3. For an average 34yr old male, non-smoker, earning $50k per annum, it would only cost $27.50 per month to secure half a million dollars of Life cover, and only $23.72 for a female in the same circumstances.

“Today it’s more important than ever for families to take steps to protect themselves financially. While Australians typically underinsure their lives, there are simple and cost effective steps families can take to plug the gap.

“Until recently, insurance was complex, hard to obtain and expensive. This put people off getting enough cover. Allianz responded by making it possible for people to get the cover they need in 12 minutes and at prices up to 20 to 30 per cent less than other insurers,” he said.

It takes about 12 minutes to buy Allianz life insurance online or over the phone, compared to a typical purchase through an insurance adviser which can take up to eight weeks.

The new Allianz product led the way in providing simple, cost effective for Australians to access high quality insurance.

The product features:


It is expected Allianz Life Plan will help address Australia’s chronic underinsurance problem.
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Notes to Editors

Daily figure for cover based on obtaining $250,000 worth of combined cover for both 34 year old male and 34 year old female.

Male, 34Yr Non Smoker, Office based Occupation
Cover Level Cover Monthly Daily
$250,000 Life Only $18.18 $0.61
$250,000 Combined (Life, Critical Illness, Perm Unable to Work) $49.46 $1.65
$500,000 Combined (Life, Critical Illness, Perm Unable to Work) $80.67 $2.69


Female, 34Yr Non Smoker, Office based Occupation
Cover Level Cover Monthly Daily
$250,000 Life Only $15.95 $0.53
$250,000 Combined (Life, Critical Illness, Perm Unable to Work) $56.46 $1.88
$500,000 Combined (Life, Critical Illness, Perm Unable to Work) $92.57 $3.09


About Allianz Australia
The Allianz Australia Group operates in Australia and New Zealand. It is one of Australia’s largest general insurers, a leading private workers’ compensation insurer, and more recently, a life insurer.

Allianz Australia delivers a wide range of personal, commercial and corporate insurance products and services. AAL is proud to be of service to more than 2 million policy holders and over 50% of Australia’s top 50% BRW listed companies have some form of insurance cover with the group.

Allianz Australia offers a wide range of insurance products and services including car insurance, home insurance and Life insurance.

Allianz Australia has approximately 3000 staff. In 2006 the company achieved a gross written premium exceeding AU$2.4 billion and investment assets of approximately AU$5.5 billion. Allianz Australia Group is a wholly owned subsidiary of the worldwide Allianz Group, one of the world’s largest insurers and investment managers.

Media enquiries:
Nicholas Scofield
Allianz Australia Insurance
Ph. 0416 088 414
Carden Calder
BlueChip Communication
Ph. 9018 8600 OR 0403 333 904


For more information on Allianz Australia Life Insurance please visit www.allianz.com.au


1 Double income family where the male is 34 years old and the female is 34 years old, and each is earning $50,000 per annum. Premium is based on $250,000 in Life, Critical Illness and Permanently Unable to Work Cover each for a male and female non-smoker working in an office based role. This amount may be more or less than actually required based on individual circumstances.
2 Source: IFSA media release, Securing Australian’s Financial Wellbeing, Release of IFSA’s Life Insurance Headland Statement, July 2007
3 Source: Rice Walker Actuaries, Investment and Financial Services Association Cost of Underinsurance Project – Analysis of Life Insurance Needs, May 2005