Research by TAL has found a generational shift in appetite for risk insurance as younger Australians take up insurance while baby boomers are not doing so.
In the life insurer’s annual Australian Financial Protection Index, TAL found younger Australians aged 18-34 improved their financial protection scores to 26.4 in 2015, up from 24.5 in 2014.
TAL also found a drop in the number of older Australians taking up insurance, with baby boomers scoring 32.6 on the index for 2015, down from 36.9 in 2014.
“One factor that may be relevant to the higher index scores among younger people is that these younger people entered the workforce at a time when post-GFC worries still permeate our culture,” TAL chief executive Jim Minto said.
“It may be that, in a more risk-sensitive climate, they are looking to various life insurance options that can support them across various personal risk situations so that they can continue paying their debts and plans and dreams for the future.
“Despite the gains among younger people, the 2015 index tells us that many Australians are either not fully understanding the benefits of life-related insurances or, if they do understand it, they aren't taking the next step to get the full amount of protection they need,” he said.
TAL also reported an increasing number of single-person households taking up risk insurance.
“With single-person households on the rise, we may well continue to see an upward trend in this group recognising the value they see in life insurance to protect them,” Mr Minto said.
“They may perhaps be increasingly aware that they only have themselves to rely on and losing their job or experiencing injury will have a huge impact on rent, mortgage repayments and other commitments."