Chief Executive of Zurich Life and Investments Colin Morgan said, “A decade ago it was still the norm for people to be paying out their mortgage in their early 50s. However, Australians are living and working longer and carrying larger debts later into life.”
Mr Morgan said that new research shows that today people are carrying mortgages all the way up to retirement, in many cases needing their superannuation to pay off the last remnants of their home loans.
Despite the cost of insurance cover coming down dramatically in the last two decades (cover for a 50-year-old today costs the same as cover for a 33-year-old in 1990), premiums still increase in line with the higher mortality for older ages which in turn drives an increased tendency to cancel or reduce cover at these ages.
“The fact that people feel they can no longer afford cover at the time they are most likely to need it is worrying and has contributed to Australia’s underinsurance problem,” said Mr Morgan.
“Our new pricing structure will make cover more affordable for older age groups which we hope will encourage more Australians to keep or take out valuable life protection.
“Pleasingly these changes are all reductions; there are no increases at all.
“As one of the last remaining independent life insurers, Zurich has a longstanding commitment to providing advisers and their customers with innovative products and outstanding value, and these changes are evidence of our continued ability to honour that commitment,” said Morgan.
Research sources used are the Reserve Bank Bulletin March 2011, ‘Household Borrowing Behaviour: evidence from HILDA’, Ellis Connolly and Daisy McGrego and. Zurich term life rates female non smoker, 1990 and current.
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