Life insurers report they have processed about 30 claims for death cover following the Victorian bushfires this year. Those claims represent about 15 per cent of the total number who died in the fires.
According to industry data, those Victorian figures are a fair reflection of the overall level of life insurance cover in the community.
A recent survey by insurer ING Australia found that, while 92 per cent of people said car insurance was a “must have” and 88 per cent said home and contents insurance was a “must have”, only 37 per cent believed life insurance was essential.
Underinsurance in Australia has long been an issue. Young people think they are healthy and will not need cover. Many believe their families would help them if there was a death or serious illness in the household. More than a third of those in the ING survey said they had no idea what they would do if the main income earner was unable towork.
Despite these findings, life insurers say they are anticipating higher levels of activity in the year ahead as people take stock of the impact of serious fires and floods, the global financial crisis and therecession.
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