As the cost of living crisis tightens its grip, a new trend is emerging: Australians are turning away from the traditional financial support networks of family and friends, instead choosing government assistance should mental ill-health prevent them from working.
Independent research commissioned by the Council of Australian Life Insurers (CALI) reveals that nearly four in ten Australians say they would apply for government assistance if they were unable to work due to mental health challenges — surpassing reliance on family and friends for the first time since April 2024.
“When we see Australians choosing the Government over their own families and friends in tough times, it’s a clear alarm: families are struggling, and the safety nets they once relied on just aren’t enough anymore,” said Christine Cupitt, CEO of CALI.
Seventy-one per cent of Australians are worried the cost of living crunch would prevent them from keeping, or taking out, life insurance. This would leave many without the safety net they may one day need.
Stretched household budgets are a growing issue, with 62 per cent of Australians citing cost as the top barrier to obtaining life insurance. To support this, people citing a ‘lack of need’ as a barrier has decreased to 30 per cent. This indicates the primary reason people don’t have life insurance is strongly linked to overall increases in the cost of living.
Lower-income earners (under $100,000 a year) are more likely to say it’s out of reach, while women (53 per cent) are significantly more likely than men (33 per cent) to report they can’t afford it.
“Without the strong financial safety net that life insurance provides, more people will fall through the cracks,” Ms Cupitt said.
Australia’s life insurers are the largest private sector provider of financial support to people experiencing mental health challenges, second only to the Federal Government. However, growing mental health challenges are bigger than Australia’s life insurers.
“Life insurers play a crucial role in people’s lives. We offer peace of mind and provide a financial safety net during life’s biggest challenges, but before customers come to us, they’ve often sought support elsewhere,” Ms Cupitt said.
“No one wants to be so unwell that they can’t work, and mental health is an area where the Government, experts, and our entire community can make a positive influence early on.”