Low income households and insurance patterns: An analysis of insurance expenditures for NILS applicants in 2019

Insurance is a pillar of financial inclusion, but in Australia low-income households are both more vulnerable to financial shocks and under-insured when compared to the general population. This research conducted a quantitative analysis of a database of over 20,000 people who applied for a No Interest Loan (NILS) in 2019 to understand their rates of insurance and average expenditure for policies. The database captured five kinds of insurance: car, house/contents, funeral plan, private health and life/unemployment.

Key findings were that only 42 per cent of the sample had any kind of insurance policy, and that generally speaking women, older people and those with higher incomes were most likely to be insured; however, these predictive patterns varied according to insurance type.

While this project provided insight into insurance patterns for low-income households, it could not answer questions of why these patterns exist. Stage 2 of this research was a qualitative exploration of how low-income households value insurance and make insurance decisions.