What Would You Let Go If Times Get Tough?

If you lost some or all of your income or financial support for an extended period of time what expenses would you cut back first?

This was the question we asked over 1,000 Australians in the 2018 annual NobleOak survey into consumer behaviour and Life Insurance.

The research, conducted in December 2018, showed that entertainment costs are the first to be cut back if Australians lost some or all of their income.

Respondents were asked to rank 13 items in the order in which they would cut back expenses if they lost some or all of their income for an extended period of time. For the second year in a row, entertainment pushed out holidays in the top slot as the item most likely to be cut back when necessary.

The results show savings/investment and Life Insurance were ranked four and five respectively in the list of items to cut when the squeeze is on.

Mortgage, rent and energy bills take priority

The payments of the mortgage or rent and energy bills have been the priority every year for the past three years, as absolute essentials when it comes to household expenses.

After entertainment, holidays and health and beauty, savings and Life Insurance are among the first costs to be cut during hard times. This is in contrast to Income Protection Insurance which respondents felt was more important to respondents ranking it as eight out of 13.

This prioritisation reflects people’s reliance on financial security as being more important than transport.

Hold the (mobile) phone

Once again,  mobile phone usage is ranked ninth in the list of expenses to be reduced in the event household costs need to be cut.

This is not surprising, as Australians’ reliance on their mobile phones increases with eight in 10 adults having a smartphone. More importantly, reliance on mobile phones continues to increase as the number of people electing to not have a fixed landline increases. Mobiles provide many options to keep in touch including voice, video and SMS.

It’s good to see that people value the security and peace of mind that Income Protection insurance provides should they suddenly need to replace their income.

Life Insurance also provides peace of mind should the unexpected happen. Having this type of cover can help provide financial protection to cover the mortgage or rent and maintain your family’s lifestyle over the longer term

Not sure how much cover you need?

The NobleOak Life Insurance calculator is an online tool that is easy to use and designed to help you with determining how much Life Insurance you may need, or whether your current cover provides the right protection. This highly intuitive tool takes less than 10 minutes to complete a range of questions and provides you with an amount of Life, TPD, Trauma and Income Protection cover that may be suitable – along with a tailored personalised report.

The Life Insurance Calculator has been independently verified by Rice Warner Actuaries, and won the 2018 RFi Group Australian Insurance Life Insurance Product – Innovation of the Year 2018.

The calculator is free to use and you can find it on our website here.

Source:

The research was conducted independently by PureProfile in December 2018 from a survey completed by 1,043 Australians.

 

Margaret Rochford

15 February 2019 - 5 minute read