Life Insurance Value Still Most Important Consideration
When buying Life Insurance, switching or renewing cover, the cost of premiums is still the No.1 consideration for people.
This is the finding from independent research commissioned by NobleOak conducted in December 2018.
Price continues to be the most important factor when consumers purchase Life Insurance, nominated by 82.0% of respondents.
In a question which invited multiple responses, the cost of the premium was well ahead of other factors such as product features (58.7%), the claims reputation of the insurer (55.2%) and service levels (29.5%).
The decision to purchase Life Insurance or Income Protection is based on an often complex process in which cost, risk, health and family issues are weighed up and assessed.
Life Insurance is part of a set of competing priorities as people make decisions based around the financial security of their family and their ability to cover the ongoing cost of premiums.
Some 40.8% of respondents said lower premiums are the main driver for switching to another insurer. When asked if respondents were going to renew their Life Insurance 15.1% said no. When asked why 32.5% cited “too expensive” as the main reason.
These results highlight the continuing trend of people looking for value when it comes to buying, renewing or switching their Life Insurance cover. Cost is also the number one reason why people don’t have life insurance.
Women were more likely to look for product features (62%) and claims reputation (59%) compared to men (55% and 51% respectively).
When these factors are broken down by age, the survey revealed that premium costs and product features are the most important considerations for people looking for cover, irrespective of their age.
In this year’s survey, respondents were also asked how the findings of the Royal Commission will impact their actions regarding Life Insurance. For the majority, 41.1%, there will be no impact. However, 23.9% said they would explore different insurers, 9.5% said they would not take out Life Insurance and 5.1% said they would not renew their cover.
For many Australians, Life Insurance is considered a necessity and while price is important, they expect the right product features and a solid claims reputation.
In addition, with the extensive media coverage of the Royal Commission, it is not surprising that it will have a negative impact on some people and that Claims Reputation continues to be such an important consideration when purchasing Life insurance.
The research referred to was conducted independently by PureProfile in December 2018 from a survey completed by over 1,000 Australians.