Who buys Direct Income Protection insurance?

16 March 2016
We examine who usually buys Direct Income Protection insurance and who benefits the most from choosing the Direct route.

Almost 1 in 4 life insurance customers take the Direct route, according to a survey by 2016 Direct Income Protection winner, NobleOak Life Insurance. Meanwhile, 2 in 5 relied on the life insurance included in their superannuation policy.

The decisive and time-poor buy Direct

There are distinct advantages to buying a one-size-fits-all income protection insurance policy, and most boil down to the fact that it is quicker and easier to apply Direct than Advised:

  • It’s simpler to apply – you can download the application form from the internet, or apply over the phone or in-store at your local bank or insurance provider branch.
  • There are fewer questions, and they are relatively easy questions to answer.
  • Minimal to no medical information is required.
  • Fast answer – you know straight away if your application has been successful.
  • Immediate death cover – you are covered straight away upon acceptance of your application.

Compare this to the more in-depth applications for Advised insurance, which take time to go through with the adviser and then can take a long time to be processed and approved. This convenience factor of buying direct is of utmost appeal to many Australians.

Direct income protection products appeal to people who know what they want and like the idea of having a straightforward policy in place to protect their finances should they be unable to work. Direct insurance is even a good quick-fix, if you want to get some cover in place right away but you still want to review your options later with a qualified financial planner.

Online natives buy Direct

A 2016 survey by NobleOak has shown that customers are increasingly looking online to get information about life insurance products.

Until now, only 16.5% of customers bought a life insurance product online, but this year’s survey found 41% use the internet as their primary source of information.

Only 32% of survey respondents sought professional advice for any of their financial needs.

Apparently, the majority (71%) of customers were not willing to pay anything for life insurance advice, not seeing the value provided by this service. Only 18% said they would pay up to $100 for advice, with a further 1% saying they would pay more than this for advice.

People in transition buy Direct

Anyone who’s just had kids, taken on a new mortgage, started an SMSF or other major investment, experienced a personal health scare, or had a friend or family member pass away or experience illness or accident, is drastically more likely to take out insurances such as income protection (NobleOak, 2016).

People will often take out income protection or life insurance at these milestones in case something happens, and then let it lapse after a few years once the urgency of the initial trigger has faded. People in transition will often choose the Direct route because their triggering event presents the sense of an urgent need.

Compare Direct Income Protection insurance policies

Compare features and price for Direct Income Protection in Australia on the Canstar website. We’ve rated each product so you can see which ones offer the best value for money.


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