Australians Are More Confused About Life Insurance Than the Rest of the World

— Here’s What Advisers Can Do About It

Insights from the Capgemini World Life Insurance Report 2027 – Australia Key Findings

Life insurance remains an important part of financial protection, but the customer journey is becoming more difficult for consumers and insurers alike. The Capgemini World Life Insurance Report 2027, researched with LIMRA, highlights a growing gap between the protection people need and how clearly the value of life insurance is explained, delivered and maintained — and Australia is feeling that gap more than most.

For financial advisers, the message is clear: sustainable client relationships cannot be built around product explanations or one-time transactions alone. They require relevant conversations, understandable guidance and continued support throughout the customer’s life stages.

Key Findings from the Report

The report surveyed more than 6,175 consumers worldwide, including 425 in Australia. Its Australia-specific findings, set against global comparisons, point to several challenges across the life insurance journey:

• Fewer Australians consider life insurance than the global average. 38% of Australian consumers say they’re considering purchasing a policy for financial security, compared to 47% globally. Affordability is the leading barrier locally — cited by 39% of Australians (35% globally) — followed by a lack of clarity and transparency around coverage and policy terms.
  
• Confusion is more pronounced in Australia. 47% of Australian consumers say they remain confused, uncertain or unconvinced about life insurance, higher than the 42% global average. Encouragingly, fewer Australians (22%) abandon the purchase journey before completing it than the global average (25%).
  
• Post-purchase communication is even more limited in Australia. 41% of Australian customers rarely or never hear from their insurer after purchasing a policy, compared to 36% globally, and 76% say the contact they do receive is limited to billing and renewals.
  
• Human guidance continues to matter, especially in Australia. 71% of Australian consumers prefer agent interaction over self-service when understanding pricing and finalising a purchase decision (67% globally), and 69% of consumers globally prefer a human agent over a chatbot or virtual agent for problem-solving.
  
• AI is becoming part of the journey, but won’t replace advice. 51% of consumers plan to use generative AI tools for product discovery within the next three years, making clear, reliable adviser guidance more important, not less.
  
• Employer-provided guidance is a bright spot. 34% of Australian employees say they receive coverage adequacy guidance from their employer, well ahead of the 25% global average — though for most, employer communication still tends to focus on logistics rather than personalised advice.

Why Consumers Struggle with Life Insurance

One of the report’s central observations is that insurance content often fails to help consumers understand and act. Consumers describe insurance information as too technical, too focused on selling and difficult to compare.

This creates a communication challenge for advisers. Even when a policy may be relevant, clients can struggle to connect its features with their own priorities, such as protecting dependants, managing debt, preparing for major life events or maintaining financial resilience.

The solution is not simply to provide more information. Advisers need to make information more relevant, practical and easier to understand. A clear conversation should help clients understand what a policy is designed to do, what it does not cover, how it fits their circumstances and what decisions they may need to revisit later.

The Continuing Role of Human Advisers

The growth of digital tools and generative AI does not remove the need for human advisers. Instead, it changes where advisers can create the most value.

The report shows that consumers, particularly in Australia, still value human interaction when they need help solving problems, understanding pricing and making purchase decisions. These moments often involve uncertainty, personal priorities and trade-offs that cannot always be addressed through generic online content.

Advisers can therefore focus on listening, asking better questions, explaining options in plain language and helping clients make decisions they understand. Technology can support preparation, administration and information discovery, but trust is strengthened when clients feel heard and guided.

Beyond the Sale: Communication That Sustains Trust

• Lead with the client’s situation. Begin with the client’s goals, responsibilities and concerns before discussing product features.
  
• Replace jargon with practical explanations. Use plain language, examples and life-stage scenarios to explain coverage, exclusions, costs and policy options.
  
• Connect advice to real moments. Use milestones such as marriage, parenthood, career changes, business ownership, debt commitments and retirement planning as prompts for relevant conversations.
  
• Build a communication rhythm. Do not allow the relationship to become limited to applications, payments and renewals. Agree on appropriate review points and follow-up touchpoints.
  
• Use technology with human judgement. Adopt digital and AI tools where they improve preparation, responsiveness and consistency, while keeping human judgement central to important client decisions.
  
• Measure long-term value. Look beyond initial sales and consider understanding, suitability, persistency, service quality and the client’s ability to make informed decisions.

Building Lasting Trust Through Relevant Advice

The Capgemini World Life Insurance Report 2027 presents a broader challenge for the life insurance industry: consumers are looking for relevance, transparency and guidance, not simply more products or more information.

For advisers, this means moving from a transaction-focused approach to a relationship-led one. The value of advice is demonstrated not only when a policy is purchased, but also when clients understand their protection, receive support as circumstances change and feel confident about the decisions they make.

Life insurance may be under pressure, but advisers have an important role in closing the understanding gap. By communicating clearly, using technology thoughtfully and maintaining meaningful engagement beyond the sale, advisers can help build the trust and long-term relationships on which better protection outcomes depend.

Source Note

Based on the Capgemini World Life Insurance Report 2027 – Australia Key Findings, produced with LIMRA (global survey of 6,175 consumers, including 425 in Australia; 198 executives, including 10 in Australia). All statistics in this article have been checked against the Australia Key Findings deck and the official press materials supplied by P&L Corporate Communications.