Australians are actively planning for the anticipated economic slowdown and making preparations to cope with its repercussions, a new report has found. NobleOak’s seventh annual survey asked 1000 Australians – almost half of whom hold life insurance cover or income protection insurance – about how they feel about the future, and the ways they’re getting ready to face it.
Respondents ranked budget tightening as the event most likely to happen to them in the next year, followed by rent increase, home loan stress and a change in employment. With financial uncertainty looming large, they indicated a preference for cutting back on a range of discretionary spending rather than reducing their outlay on life insurance cover and income protection.
Among the findings
- As COVID concerns decline and mental health awareness rises, Aussies are generally happy and showing admirable resilience.
- Growing financial concerns, with an increase in online searches for information on life insurance.
- Only 11% of respondents say an adviser would be their first point of contact when seeking life insurance. The number has been declining for seven years, with many more seeking information from family members instead.
“The findings suggest respondents would prefer to cut back on a range of leisure and material expenses before reducing their life insurance or income protection insurance, which provides support should some or all of their income be lost for a period of time,” Anthony Brown, CEO of NobleOak, tells Acuity. “Cost can still be a barrier, but confidence in insurers is high, and so is confidence that they’ll pay out.”
Income fears Many Australians are bracing for a potential recession, with 61% worried it will leave them out of work or with a reduced income – a 28% rise in just a year. They also rank ‘good value’ and ‘lowest price’ as the most important factors in purchasing insurance. Two years ago, only 16% cited such factors as the most important.
Life insurance brings happiness
“The good news is that Australians, for the most part, are as happy as they were in the prior year, despite tough economic conditions,” says Brown. “It’s noticeable that in every survey since 2018, those with life insurance are happier on average than those without.” One possible explanation for that is knowing that their families are better protected – the main reason for taking out cover is to look after loved ones. Interestingly, the country is equally split over whether mental health has declined or improved since before COVID.
“In every survey since 2018, those with life insurance are happier on average than those without.”
“Respondents are increasingly buying insurance online,” Brown reveals. “Only a fifth were doing so six years ago, but now more than half compare cover online, and 43% say it’s their preferred way to purchase it.
“When you’re worried about your financial outlook and want to cut back on spending, it’s easy to look at reducing your insurance premiums, but the survey findings suggest that Australians are resisting that temptation, realising that it can be a false economy.”
Find out more
Fully underwritten life insurance cover is available under NobleOak’s Premium Life Direct product, which also includes income protection insurance, trauma insurance and total & permanent disablement insurance. To find out more about the benefits available to CA ANZ members, visit www.nobleoak.com.au/charteredaccountants or call NobleOak on 1300 108 490.
NobleOak Whitepaper available at www.nobleoak.com.au/tools-guides/whitepapers/ Important information: Please note, cover available to Australian residents only. The Target Market Determination for NobleOak’s Premium Life Direct insurance is available on site. NobleOak Life Limited ABN 85 087 648 708 AFSL No. 247302 issues the products. This information is of a general nature only and does not take into consideration your objectives, financial situation or needs. Always consider the product disclosure statement (PDS) (available at nobleoak.com.au) to see if the product is right for you.