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What is ‘essential’ insurance?
What’s the most important insurance to have, according to Australians?
What is ‘essential’ insurance?
If you answered car insurance and home and contents insurance – you’re correct.
They’re the only two types of insurance that are considered “essential services” by Australian policyholders, according to the results of a new survey from KPMG.
The report, A COVID-19 call to action for the Australian insurance and wealth sector, considered the relationship Australian consumers have with their insurance, superannuation and advice products and services.
Nearly four in five policyholders (79 per cent) classed their car insurance as essential, while home and contents insurance was considered a necessity by 68 per cent of policyholders.
According to KPMG, the results were somewhat surprising, given the current COVID-19 crisis, which meant people have been driving less due to social distancing restrictions and closures, and people have been working from home.
On the other end of the spectrum, just 35 per cent of life insurance policyholders considered such a product an “essential service”.
Even less considered income protection as vital, at 30 per cent.
Despite this, perceptions of the importance of these types of insurance holders did spike for individuals who had had their salary reduced (50 per cent higher) due to COVID-19.
A 44 per cent increase in perceived importance was also observed where that policyholder had lost their job.
But with eligibility to access income protection covered by some strict policy guidelines, not everyone could rely on their product to protect them if they did find themselves out of a job due to COVID-19, and led KPMG to conclude that the spike “signals a lack of understanding of the policies and their eligibility criteria”.
nestegg has previously answered the question: Will my income protection insurance cover COVID-19?
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