Many Australian couples and families could face financial hardship if the secondary income earner was unable to work, according to MetLife Australia research into life insurance.
The MetLife Adviser-Client Relationship Report 2018 found that of consumers with life insurance who are married or in a de facto relationship, 73% have more than one income earner in the household. Of this group, around 6 in 10 state that they wouldn’t be able to maintain their existing lifestyle for any longer than two years should the secondary income earner be unable to work.
A significant number of the secondary breadwinners are working casual or part-time. Of these workers, half of women and one-fourth of men are the parents of dependents. MetLife Australia found this group holds lower levels of insurance in all categories when compared to their full-time counterparts.
Specifically, death cover is held by 70% of casual and parttime workers compared to 81% of the overall group, total and permanent disablement (TPD) cover is held by 51% compared to 60%, and income protection is held by 48% compared to 58%. The largest difference is seen in trauma cover, with only 4% of casual and part-time workers covered compared to 35% of the overall group.
Casual and part-time workers are also less confident than full-time workers in explaining the various features of their life insurance to a friend or colleague, MetLife Australia found.
Commenting on the findings, Matt Lippiatt, MetLife Australia's head of retail sales, said that underinsurance is a real problem in Australia, particularly among casual and part-time workers. There is clear evidence that many families are unprepared for the loss of secondary income, with greater focus often given to the primary income earner.
“Particularly for families with children, if one partner is staying at home or working part-time, it can be just as important to insure them as it is the primary breadwinner,” he said.
The report examined consumer and small to medium enterprise (SME) attitudes to purchasing life insurance through a financial adviser, surveying 1,191 people in total. The MetLife Adviser-Client Relationship Report 2018 interviewed approximately 700 consumers who have purchased life insurance through an adviser, 300 consumers who are considering purchasing life insurance through an adviser in the next two years and 200 SMEs.
Mr Lippiatt said that new solutions are coming onto the market today that recognise the changing nature of work and cater specifically to the needs of young families. MetLife Australia itself recently launched MetLife Protect, a modular life insurance product enabling financial advisers to meet the needs of SMEs and families. The product is designed to be tailored and flexible over time to meet specific and evolving individual needs.
MetLife Insurance, an affiliate of MetLife, Inc, is a specialist provider of life insurance to affinity partners, superannuation trustees and employers in Australia.
Founded in 1868, MetLife, Inc, through its subsidiaries and affiliates, has operations in more than 40 countries and holds leading market positions in the US, Japan, Latin America, Asia, Europe and the Middle East.
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