Prepare and protect with the right insurance
Most Australians are dangerously underinsured. Are you one of them?
According to the statistics, a whopping 95% of Australian families don’t have enough insurance cover.
While we prioritise car insurance (79% of us have that), and home and building contents (77% of us have that), only 54 percent of us have life insurance cover, and only 45% of us have income protection insurance.*
So why are Australians so nonchalant about insurance?
Is it a case of ‘She’ll be right mate?’ – an attitude that we won’t need insurance?
Maybe … in some cases.
But in many instances, it’s simply a lack of knowledge and understanding. This means that many of us think we’re adequately protected by insurance, when the reality is we’re not, says Julie Nipperess of MoneyLink Financial Planning.
The myth about Superannuation and Life Insurance
Because there is default life insurance cover in superannuation, most Aussies who have this life insurance believe that they’re adequately covered. But according to the figures, the median level of cover is estimated to be just over $140,000* – not nearly enough if the deceased person is leaving behind a spouse, children, and a mortgage.
The same goes with the policies we take out when we make big financial commitments with lenders, like a business loan or a mortgage. More often than not, these generic polices don’t offer nearly enough insurance cover.
“More specifically,” explains Julie, “These policies are not tailored – meaning they don’t take into account your individual circumstances – your lifestyle, your financial commitments, your plans for the future, things like your children’s education or how much it really costs you to live the life you’re enjoying – in other words, the standard of living that your family stands to lose, if you die…. Everything you’ve worked for can be wiped out, without the right insurance protection in place.
“Dealing with our own mortality is not easy, but looking realistically at your household expenditure now, and in the future, is the only way to understand how much cover you’re loved ones are likely to need if you die,” she says.
In this video, Julie tells the story of a client who underwent an insurance review only a few months before being unexpectedly diagnosed with an aggressive form of cancer. Under previous policies he would not have been covered for all of the expenses that mounted up while he was recovering, nor would he have had adequate income protection.
“This was amazing timing. There was no hint that this client was sick, and the cancer came completely out of the blue. He was incredibly fortunate to have sought financial advice when he did,” says Julie.
Total and Permanent Disability Cover and Trauma Insurance
Many Australians don’t have Total and Permanent Disability or Trauma Insurance cover and both can be of enormous benefit if you have an accident or face a life-threatening illness that interrupts your life or changes it completely.
A major accident or a serious illness can lead to very high medical bills. Not just that, but it can mean extended periods away from work, not earning an income. In some instances, it can mean major expenditure if you need to make changes to your lifestyle and your home to accommodate a disability.
Life is impossible to predict. But the right insurance will make all the difference for you and your family, if something does go wrong. It’s worthwhile reviewing all of your policies: life insurance, income protection insurance, and medical insurance because these should change as you do too, and people have different needs at different stages of life.
Because the danger, if you don’t, is that you won’t even know you’re underinsured until it’s too late. For a full review of all of your insurance policies, talk to us.
Julie Nipperess is an Authorised Representative of MoneyLink Financial Planning Pty Ltd, an AFSL holder.
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