Family a Priority for Life Insurance: Allianz study
22 May 2009
Australians are ruled by their heart and their head when considering life insurance, with the financial security of their loved ones the overwhelming reason many Australians choose to take out life insurance, according to new research by Allianz Australia.
A survey of Allianz’s life insurance customers, conducted by Arnold and Bolingbroke, found 80 per cent of respondents took out life insurance to provide financial security for their spouse and children in the event that they could not support them due to death or disability.
Sixty three per cent said that one of their main concerns was ensuring the family mortgage would be paid if the unexpected happened. Further, 28 per cent of those surveyed said they opted for life insurance to ease the burden on loved ones and cover unplanned costs like funeral expenses.
“Protecting number two, three and four, rather than ‘number one’, was of paramount importance to those surveyed,” said Mr Jonathan Poole, CEO of Allianz Australia Life Insurance.
“The research clearly shows that life insurance is chosen for a mix of emotional and pragmatic reasons - to protect partners and children in case something tragic occurs. Looking after the family’s financial needs was the overwhelming reason for purchasing life insurance.”
Over half of those who responded to the research indicated that they had household debt of more than $200,000.
“Given these figures, it’s little surprise that people want to leave behind enough money to pay their mortgage and leave a nest egg so their partner and children can continue a stable and secure family life,” said Mr Poole.
While around 94 per cent of those surveyed felt it was critical for families with young children to have life insurance, many claimed there were still significant barriers stopping them taking out the insurance they need.
For example, 41 per cent said they found the process of taking out life insurance difficult, 25 per cent said it was confusing and 42 per cent generally did not trust life insurance companies to pay out on a claim. Affordability, simplicity of the process and a trusted brand are therefore key considerations when protecting the family.
Over 80 per cent said they did not want to see a financial planner to take out life insurance. The main reasons given for choosing Allianz for life insurance were low premiums (64%), the ability to apply and buy online (57 per cent) and because Allianz was a well-known and established company (52 per cent).
“What many people do not realise is that the efficiency of the Internet means that life insurance, disability and critical illness protection is very affordable and easy to access these days,” said Mr Poole. “Allianz Australia Life Insurance has recently increased the maximum level of cover available to $1.5 million and Australians can generally apply and be approved for cover in less than 12 minutes, and at an extremely competitive price.
“There’s no need to see a financial planer or to have medical tests, and in just 12 minutes you can enjoy the peace of mind of knowing that your partner and children will be protected if something unforeseen occurs,” he said.
According to the Investment and Financial Services Association, the amount of life insurance cover a family needs can be calculated by taking annual income and multiplying it by 10*.
This level of cover generally ensures that breadwinners and their families will be adequately protected in the event of death or permanent disability.
For more information about Allianz Australia Life Insurance please visit allianz.com.au
Source: IFSA, Securing Australians’ Financial Wellbeing 2007.
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Best General Insurance Company 2007*
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 also provides life insurance.
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 200 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 3300 staff. Allianz Australia Group is a wholly owned subsidiary of the worldwide Allianz Group, one of the world’s largest financial services companies.
The Allianz Group’s commitment to social, environmental and economic sustainability has been acknowledged internationally by the Dow Jones Sustainability Index, which recognised Allianz as the most sustainable general insurer in the world in 2007. In Australia, Allianz is a member of the Greenhouse Challenge Plus program, which is a cooperative partnership between industry and the
Australian Government that aims to reduce greenhouse gas emissions.
*Australian Banking and Finance Insurance Awards