Macquarie Reports on Consumer Attitudes Toward Life Insurance: Lifebroker

Australian consumers are not confident in making decisions about life insurance, according to Gary Lembit, Head of Research for Macquarie Adviser Services.

Lifebroker notes that this lack of confidence was one finding of a study of consumers' attitudes toward life insurance. Macquarie surveyed 1000 Australians and shared its findings with financial planners at a recent seminar, a presentation that was part of the company's "Macquarie Life Roadshow 2012".

According to the survey, almost half of all consumers approach major life decisions with caution, but, despite this reality, a similar proportion wish to be perceived as making those same decisions confidently. When purchasing insurance, women describe themselves as less confident than men and tend to select lower amounts of coverage.

In general, however, consumer confidence is higher among those working with a financial planner, and some 80% of survey participants preferred to meet with their advisors in person. Telephone advice was preferred by only 14% of respondents.

Lembit also reported that the number of parents with standalone insurance or with no life cover fell from 2006 to 2012, a trend that he attributed to the increase in life cover through super. In the opinion of Justin Delaney, Macquarie's Head of Insurance and Platforms, many consumers do not have a firm grasp of whether their needs were effectively met by super-based life insurance alone.

When asked about criteria they would use to evaluate insurance providers, respondents minimized the importance of cost, instead focussing on prompt and efficient processing of claims, the availability of products tailored to specific needs, levels of coverage and clarity of policy terms. According to the study, however, the reality is different, and cost was seen as the biggest barrier to purchasing life insurance. In addition, 45% of those without life cover see life insurance as secondary in importance to health insurance.

According to Lembit, this information provides valuable insight into consumer attitudes, and that insight can be translated into more effective ways for advisers to approach their clients. He emphasised the importance of "peace of mind," what Lembit called "the number one thing that life insurance gives you." If that fundamental benefit is stressed, it will resonate with consumers. "They're not seeing the benefits because they haven't made the link between the peace of mind, having the insurance and feeling good," he said. "You guys have the opportunity to sell peace of mind to the people."

Lifebroker is Australia's leading specialist life insurance broker.

Helping people find the best cover that's right for them, at whatever life stage they may be. Lifebroker also provides group life insurance as well as funeral insurance. Lifebroker has access to Australia's leading life insurance companies, which allows us to source the best possible cover and price.