A new report from Australian life insurer NobleOak has indicated a growing interest in life insurance coverage, although many policyholders still struggle with key industry terminology.
The 2025 edition of the NobleOak Life Insurance Pulse Report revealed that 60% of Australians now hold a life insurance policy – an increase from 55% recorded the previous year.
The data suggested that despite the uptick in coverage, comprehension around specific policy features, such as “fully underwritten” insurance, remains low. Only 30% of respondents said they understood the term, although half of them had life insurance.
Among those familiar with “fully underwritten” policies, 44% considered them very important and 54% saw them as somewhat important.
NobleOak CEO Anthony Brown (pictured) described the report as a gauge for how Australians are thinking about insurance and financial security.
“This year’s report found life insurance has now become a priority purchase for many Australians, outranking education, mobile phone use, some grocery purchases, and gym memberships and holidays,” he said. “It is worrying, however, to discover that the general understanding of the benefit of a fully underwritten life insurance policy is low, given we believe that fully underwritten cover provides customers with more peace of mind, particularly at time of claim.”
Financial confidence appears to be improving, with 76% of respondents saying they feel able to handle unexpected expenses.
However, disparities exist across sectors and demographics. Medical professionals reported a higher rate of financial insecurity (37%) compared to tradespeople (23%), and women were more likely than men to report low financial confidence (28% versus 20%).
Roughly 23% of policyholders indicated they believed their current insurance was inadequate for their needs. Use of financial advisers returned to pre-pandemic levels at 32%, although advice largely focuses on superannuation and investment planning rather than insurance coverage.
These findings come amid broader changes highlighted by regulators. The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have released updated data showing how insurers handle claims and disputes.
According to APRA, claim admittance rates were highest for group superannuation death benefits (99%), followed by group ordinary policies (98%). Total and permanent disability (TPD) claim acceptance ranged from 84% in advised individual policies to 92% in group super. Trauma and income protection insurance had approval rates above 85% across most distribution channels.
Processing times varied significantly. Most death claims were finalised within two weeks, whereas TPD claims took up to four months on average, with 37% resolved in two to six months.
Dispute rates were highest for income protection policies among non-advised individual clients, with 410 disputes per 100,000 insured lives. Most disputes – over 80% – were closed within 45 days, although those involving TPD claims often took longer.
