60% of Australians feel financially secure, but 23% still underinsured

23% of life insurance holders said they did not believe their cover was sufficient.

Life insurance is becoming a greater priority for Australians, with 60% of Australians now hold some form of life cover or income protection, up from 55% last year and around 51% in the previous three years.

The latest Pulse Report by NobleOak Life Insurance further revealed that 76% of respondents said they feel in control of their personal finances, a significant increase from 65% in the prior year. 

Meanwhile, 59% considered themselves healthy, up from 55%, and 21% said their health had improved over the past year.

Despite these gains, many Australians remain concerned about the adequacy of their coverage. 
This year, 23% of life insurance holders said they did not believe their cover was sufficient, up from 18% in 2024. 

In comparison, only 13% of general insurance customers felt underinsured.

The fear of not having enough life cover may be driven by ongoing cost-of-living pressures and a heightened desire to provide financial protection for loved ones.

When choosing a provider, Australians are placing more weight on value and claims reputation than price. 

Confidence in claims-paying ability is much higher amongst policyholders than those without life insurance, which may explain some of the reluctance amongst the uninsured. 

However, for lower-income households, affordability remains the most important factor. Regional respondents were also more likely to prioritise choosing an Australian-owned insurer.

Understanding of policy types remains a challenge. 

Forty-one percent of Australians said they were unfamiliar with the term “fully underwritten,” with younger people comprising half of this group. 

Amongst those who understand the term, nearly all said it was at least somewhat important.

Most preferred fully underwritten cover over partially underwritten policies, recognising the former’s value in ensuring certainty at claims time.

Attitudes towards the use of artificial intelligence (AI) in life insurance remain mixed. Only 25% of respondents expressed comfort with AI being used to streamline application processes, whilst 41% were uncomfortable with it.

More than a quarter said they would refuse to switch to an insurer that uses AI at the application stage, even if it meant faster processing and lower premiums. 

Men and younger people were more accepting of AI than women and older respondents.

The use of financial advisers and brokers has also rebounded to pre-pandemic levels, with 32% of respondents now seeking advice, up from 27% in the last report. 

However, the majority of this advice focuses on superannuation and investment.

Only a small proportion of respondents appear to receive professional guidance on their life insurance needs, with 68% saying they do not use an adviser at all.