Australians continue to view life insurance as a priority and will make cuts to budgets such as holidays, entertainment and even groceries to afford it, according to an annual survey by NobleOak.

The proportion of people with life insurance or income protection increased to 60% in January from 55% the previous year and 51% three years ago, the insurer says.

“We see a higher propensity to hold life insurance products with particular cohorts, including younger respondents, those living in major cities, higher-income earners and mortgage-holders.

“As we saw last year, life insurance remains a priority for many, with some reducing their budget for items like groceries, education and mobile phone usage to be able to afford their premiums.”

Survey respondents were asked to rank what they would cut back on first if they lost all their income or financial support for an extended period.

Luxury purchases such as holidays, entertainment and health and beauty would typically be dropped or reduced first.

“Overall, they would cut grocery costs just before life insurance products,” NobleOak said.

“While the results are similar to last year, income protection has moved up the list of priorities before grocery costs, whereas last year it sat slightly behind this common household expense."

In other key findings, more than two in five life policyholders believe they do not have enough coverage for their needs; the use of advisers for life insurance or income protection requirements has increased to pre-covid levels (14% of respondents); and women report having less financial confidence than men.

See the report here.