Recent ING research shows one in three Australians currently without life insurance would probably never take it up.
The finding was among many confirming Australians have an optimistic "she'll be right" culture, contributing to the society being underinsured.
The reasons given for not taking out life insurance varied, with 40 per cent of single people saying life cover was only for people with kids.
Thirty-four per cent of those without cover and with children over 12 said it was for rich people, while 48 per cent of people aged between 55 and 65 said they were too old to be eligible.
However, one perception of Australians is the belief insurance companies will not pay out a life policy upon the policy holder's death.
Having a financial adviser did not abate this worry either, with 49 per cent of those participants using a financial planner still saying a potential claim would be held up by bureaucratic processes.
"In reality we are paying out millions every day. We are probably paying out $1 million today and will be paying out $1 million tomorrow," ING Australia head of products, marketing, and reinsurance Gerard Kerr said.
"We are not getting that message across."
The research revealed the insurance sector needs to understand people's attitude toward insurance a lot more than it does currently, according to Kerr.
"You cannot use a broad brush [approach to the problem] - you need to look at the different customer segments and customer components," he said.
The research was performed by Galileo Kaleidoscope and included a qualitative and a quantitative phase with a total sample size of 1000 people.
