The Australian Attitudes Towards Insurance survey by Asteron Life sampled over 1,500 Australians with 51% of respondents saying that having children triggered their decision to buy life insurance.
Other prompts to get life insurance included getting older (39%) and getting a mortgage (38%).
The survey report showed the average Australian has a child at 31 and buys a first home at 34.
Other reasons Australians buy life insurance
Having a child was also found to be the key driving factor for people taking out other forms of life insurance including total and permanent disability (TPD) and trauma. Income protection was the exception, where buying a house was the key motivator.
Another nationwide survey, commissioned by life insurance provider TAL, found that 52% of Australians held one or more types of life insurance. However, a greater number (63%) of Australians who own a home with a mortgage held a policy.
TAL Group CEO Jim Minto said: “Those who have a mortgage or who have worked hard to save money are conscious that they need to protect their dreams in order to avoid losing everything should their income stop due to injury or illness.”
Once people have paid off their home, life insurance may become less of a priority, with 48% of respondents who owned their property outright having a policy. Only 41% of renters held a policy.
When it came to income, respondents earning over $90K were more likely to have a life insurance policy (63%) compared to those earning under $40K (29%).
According to the survey by Asteron Life, 30% of Australians would wait for something to happen before they purchased life insurance (such as a health scare). More than half (51%) of respondents said they planned to use their savings to cover the cost of injury or illness and one in four had no plan at all.
Taking stock of your financial position
Asteron Life lifestyle coach Tenar Roberts suggested readers conduct a regular financial health check, perhaps when filing their annual tax return.
“Getting some financial advice specific to your lifestyle and values can go a long way in giving you a greater sense of control and freedom,” Ms Roberts said.
“It may give you greater confidence to pursue the things you really want like a family, home ownership or starting your own business.”
When considering whether you would like to take out a life insurance policy, it is a good idea to understand what you would like covered. Depending on your policy and provider, life insurance may be able to assist with some of the following:
- Fund medical treatment or rehabilitation costs
- Pay towards a mortgage and other debts
- Meet ongoing household expenses
- Pay for school and university fees
- Pay for extra child care or home services
- Cover the cost of funeral expenses
When deciding whether life insurance is right for you, it’s important to consider if the benefits of this type of insurance justify the costs involved. In addition, consider whether you have cover through your superannuation and whether any policy you currently hold provides adequate cover for your needs. It may be a good idea to consult a professional for financial advice before deciding which type of cover might be most suited to your needs.