29 Apr 2014, By Alisha Buaya, financialobserver
Many Australians are taking a significant risk and stopping their living insurance policies just before the average age when a claim is made, according to TAL.
New analysis from the life insurer found the average age a person discontinued one or more types of living insurance policies – cover for disability, critical illness/trauma and income protection – was 45, yet the average age a claim was made at was 46.5.
The analysis for the 12 months to September 2013 for advised policies of living insurance did not include traditional life insurance where a lump sum was paid upon death.
With the rising cost of living forcing people to rethink their domestic budgets, TAL Group chief executive Jim Minto described the figures as disturbing as it demonstrated the customers who were stopping their policies were those likely to need financial protection.
“It is very unfortunate that those people who stop their policies for this reason do not see financial protection as essential for themselves and their families,” Minto said yesterday.
Last year, TAL’s total claim payout figure rose 45 per cent to $843 million.
While the increased rate of payouts demonstrated the value of life insurance in protecting customers and their families, Minto said he was concerned for those who were more likely to need the protection of a living insurance policy.
“Life insurance provides peace of mind, helping people sleep better at night, but there is a tangible benefit with claim payments helping people not only protect the life they have created, but the one they have dreamed of for the future,” he said.
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