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Life Insurance

Life insurance and happiness – is there a connection?

20 Apr 2022

Life Insurance by Life Stage

The choices you make today can impact your long-term health, wealth and happiness. Understand the important role Life Insurance can play in key life events.

Have you put off buying life insurance, perhaps because you think it isn’t affordable or it’s too time-consuming to find the right policies? You’re not alone.

Research commissioned by NobleOak and conducted by PureProfile reveals that nearly half of Australians do not have any life insurance products, such as term life insurance or income protection cover. The top 3 reasons given for not having life insurance include: too expensive 44%, don’t expect to use it 13% and don’t see value in having it 11%.

And even those who do have a policy may not have the right amount of cover to meet their needs.

Is underinsurance an issue?

According to research by financial services consultancy company Rice Warner the total sum insured for term life insurance in Australia has decreased by 17% and for TPD cover by 19% between June 2018 and June 2020. In fact, cover for TPD would only cover 29% of TPD needs on an income replacement basis.

Of concern is that the underinsurance gap is greater for parents with children.

The raw survey data behind the 2022 NobleOak research suggests that in the event of a major illness such as cancer preventing people from working, 35% of respondents said they would rely on their savings to support them whilst 27% would use their private health cover or Medicare.

However, amongst those people with life insurance, 27% indicated they would rely on their savings; whereas 40% of those without life insurance indicated they would do so.

This leaves a major proportion of the population, and their families, vulnerable to financial hardship and potentially ruinous costs, a serious issue not just for them, but for the wider Australian community. In extreme circumstances, people might be forced to sell the family home, sell other assets, or rely on family and friends.

Are you adequately covered?

There can be both an emotional and financial cost to a lack of different types of life insurance  such as term life insurance, disability income insurance or accident and sickness insurance, especially if you’re the main income earner. If something did happen that prevented you from working for a while, or even resulted in your death, your family’s lifestyle and financial security could suffer.

And while workers’ compensation and health insurance may provide benefits in certain circumstances, these types of cover tend to be limited.  The Rice Warner report shows that the basic level of death cover needed for parents aged 30 is $561,000 and for parents aged 50 it is $207,000.

Increasingly, many people have life insurance through their super fund, with levels of cover often being determined by their age rather than life circumstances being taken into account. Also, the introduction of the Protecting Your Super (PYS)/ Putting Members’ Interests First (PMIF) legislation has resulted in default insurance cover for new members under the age of 25 no longer being in place.

Cover held outside super may offer more opportunity to choose levels and types of cover to suit individual needs. Increasingly, people are buying cover direct or online as revealed in the NobleOak research where 48% now prefer to buy their insurance through websites.

Are people with life insurance happier?

Whilst Australians generally continue to be significantly underinsured for Life and Income Protection cover, NobleOak’s research  shows that people who have cover are happier than those without.

In fact, those taking a positive action to help protect their loved ones financially by buying life insurance report higher overall happiness levels. For those with direct life insurance, 82% rate their happiness at 6 out of 10 or more, for those with non-direct life insurance, it’s 77% but for those without life insurance it’s only 64%.

With good information, finding the right type of insurance and level of cover for your circumstances doesn’t have to be complicated or too costly, providing you with the added benefit of being able to help protect the financial future of your loved ones.

Taking out life insurance may be one of the most important financial decisions you can make. To find out more about NobleOak life insurance products or get a quote, call a NobleOak Life Australian-based insurance team member on 1300 014 494 or go online for a no-obligation quote.

This is general information only and does not take into consideration your individual circumstances, objectives, financial situation, or needs. Consider the PDS for the product, as well as the target market determination, available at www.nobleoak.com.au.



NobleOak research was conducted independently by Pureprofile Australia Pty Ltd in December 2021 from a survey completed by over 1,000 Australians between the ages of 30 and 60 years old.


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