Cover confusion is costly

Are your clients at risk?

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If your clients are confused about what their life insurance actually covers, they’re not alone.

In today’s cost-conscious environment, Australians are scrutinising every dollar - meaning insurance is moving from a “set and forget” item to a live conversation.

NobleOak research shows that 60% now hold some form of life insurance or income protection - up from 55% last year and well above the three-year average of 51%.

But while cover uptake is rising, comprehension remains low. Many Australians believe the default policy in their super will support them in a crisis - but would it actually pay out if they were off work for six months? Or if they were diagnosed with a serious illness?

That question is becoming more urgent - especially when it comes to mental health.

According to Council of Australian Life Insurers (CALI), mental health conditions are now the leading cause of TPD claims - accounting for nearly one in three payouts.

In 2024 alone, insurers paid over $2.2 billion in mental-health-related retail claims - almost double the figure from five years ago. Income protection claims linked to mental health now total $887 million, representing one in five of all such claims.

CALI’s data reflects a growing health concern - but it also raises deeper questions about the resilience of group insurance, where definitions and coverage can shift in response to rising claims.