A high-level view of the FSC Metlife Research into understanding consumer barriers to adequacy in life insurance in Australia is explained in this infographic. To read the full report visit: http://tinyurl.com/qdrtffv

1. Spending priorities: what australians are willing to sacrifice if money became tight:
Life insurance ownership through superannuation
Life insurance cover cost expectations
LIFESTAGE PROFILES Total
Young
SINK
Pre-
family
Young
Family
Older
Family
Pre-
Retirees
Top 3 stated barriers to income
protection % % % % % %
Too expensive 57 49 58 58 59 57
No spare funds 40 36 34 41 45 40
Poor value / waste of money 37 37 43 33 33 37
APATHY TO ACTIONUnderstanding consumer barriers to adequacy in life insurance in Australia
We know Australians are chronically underinsured.
We wanted to find out why.
3 in 4 Australians think life insurance is only “death cover”
Life insurance is just
as likely to be acquired
by default through
superannuation than
through active purchase
LIFE INSURANCE IS POORLY UNDERSTOOD
MAIN SOURCES OF INFORMATION
FOR LIFE INSURANCE
PRODUCTS COST LESS
THAN CONSUMERS THINK…
BUT THEY ARE NOT WILLING TO PAY
CONSUMERS KNOW THEY NEED LIFE INSURANCE…
BUT THAT’S NOT ENOUGH TO MOTIVATE PURCHASE
AUSTRALIANS NEED TO KNOW MORE
Australians think
life insurance is
“death cover”
of Australians own or
are aware of owning
life insurance
of those with life insurance
don’t know how much
they are covered for
the underinsurance
gap for working
Australians
3 in 4 48% 66%$1.1
trillion
working Australians say
they don’t know enough
to provide any advice on
life insurance
policy holders don’t
know how to identify a
good product
Most working
Australians don’t
know how they would
decide to choose a life
insurance product
1 in 3
USE ONLINE
44% USE INSURANCE
ORGANISATIONS
38% PURCHASE
THROUGH
SUPERANNUATION
37%
1 in 10
• Most Australians don’t
understand what life
insurance coverage is
or should be
• Having enough funds to pay the bills and to live
comfortably is the top concern for half of Australians
• Visible assets - Cars and houses – are priorities over the things that
matter every day but can’t be replaced – your health and your life
• Two thirds of those who
own a life insurance
product don’t know how
much they are covered for
• Recommended coverage
for life insurance
or disability is 10 x
household earnings
• 15 x household earnings
is required to maintain
current lifestyle
LIFESTAGE PROFILES Total
Young
SINK Pre-family
Young
Family
Older
Family
Pre-
Retirees
Associations with the term ‘life insurance’ % % % % % %
A lump sum payment upon death 75 60 69 77 77 83
A lump sum to cover costs of accidental death or specific
illnesses e.g. heart attack, cancer
47 46 43 50 48 49
A lump sum upon becoming permanently disabled and being
unable to ever work
32 25 36 33 33 31
Payments to cover your income if you can’t work because of
illness, injury
27 25 31 29 30 22
Ever thought about the financial impact if… household’s main income earner?There is a disconnect
between recognising
potential income loss
as a financial concern
and acting to protect
against it.
Less than half of Australians
own or are aware of owning a
life insurance product.
• Australians overestimate the
cost of life insurance and
underestimate the value
• Consumers think the average
insurance premium will cost
around $1,500 per year
• They will pay 1/3 to 1/2
of that
• The average cost of Life
insurance for a non-smoking
Australian male aged 35 is
$600 per annum
REASONS WHY CONSUMERS
DON’T BUY LIFE INSURANCE
AND INCOME PROTECTIONTOP 3Too
expensive
1 Waste of
money/poor
value
2 No spare
money
3
What
motivates
consumers?
The average
cost of Life
insurance for
a non-smoking
Australian male
aged 35 is $600
per annum
THE
SURVEY
The research was prepared for the Financial Services Council and MetLife by GfK
Australia. It is based on a two-phased research program comprising two ‘conflict’ focus
groups of consumers and a 15 minute online survey of 1,106 Australians of working age.
LIFESTAGE PROFILES Total
Young
SINK
Pre-
family
Young
Family
Older
Family
Pre-
Retirees
n= 453 74 90 108 75 97
Most persuasive messages - life insurance % % % % % %
Government provides a tax incentive if you have it 22 20 20 19 27 24
By purchasing it through your Super you're covered without
having to take away from your day to day income
16 9 15 17 13 24
A minimum level of insurance is mandatory to avoid extra
taxation
14 17 16 12 13 13
Approximately 95% of all life insurance claims are paid by
insurers
12 16 12 15 14 6
It ensures your family doesn’t have to worry about income if you
die, giving you the freedom to maintain your lifestyle, no matter
what happens.
11 11 13 10 12 9
1/3 of women + ¼ of men will suffer cancer… The majority of
Australians wouldn’t have enough money to live if they died
from cancer.
9 9 10 11 8 6
Government cutbacks on welfare will mean assistance for
disability will no longer be available
8 10 9 8 4 10
Insurance is available to ensure you and your family will have
enough money if the worst happens; you just need to choose it.
8 10 6 7 9 7