Insurance

Most people wouldn’t decide to insure half the value of their car. So why are most Australians underinsured?

Research found that only 4% of full-time workers in the mid-thirties with young children had sufficient cover (estimated at 10 times taxable earnings). Research also found that life insurance via superannuation provided only 20% of the cover they required¹.

1. Source: Australia Government, Australian Trade Commission, Insurance in Australia September 2009

Myth 1. I have enough insurance inside my super.

This is unlikely. Remember the minimum level of cover provided via your super fund is set with all members in mind it is therefore unlikely to be exactly the level of cover you and your family need. What would happen if the principal income earner of the family died? Would the life insurance pay out the mortgage debt? Contact your super fund to find out your level of cover.

Research also found that life insurance via superannuation provided only 20% of the cover they required¹.

1. Source: Australia Government, Australian Trade Commission, Insurance in Australia September 2009

Myth 2. I don’t need insurance, the Government will look after me if I get sick or injured.

The maximum disability support pension is ~$18,000 pa. Would this cover your current lifestyle?

See http://www.humanservices.gov.au/customer/services/centrelink/disability-support-pension

Myth 3. Workers’ compensation will cover me.

Not usually. Workers’ compensation only covers accidents or injuries that occur during working hours or for an illness that’s the direct result of your employment. The majority of accidents and illnesses occur outside of the workplace. So if you want to protect your lifestyle and your family it’s unwise to rely on workers’ compensation alone.

See http://www.lifewise.org.au/

Myth 4. Life insurance is not affordable.

For most Australians, insurance is very affordable. For example, a 35 year old male, non-smoker applying for $500,000 of Life Insurance cover the monthly premium would be approximately $30. A 35 year old female, non-smoker applying for $500,000 of Life Insurance cover the monthly premium would be approximately $25.

That’s peace of mind for less than the cost of a coffee a day. If you have some existing cover, increasing this to adequate levels may cost you even less than that coffee.
Approximate monthly insurance premiums for a non smoker applying for $500,000 for Life only or $500,000 for Life/TPD:

Male 35yrs old Stepped Premium Level Premium
Life only $32 $68
Life/TPD $47 $103

 

Female 35yrs old Stepped Premium Level Premium
Life only $24 $58
Life/TPD $29 $62

 

Myth 5. Life insurance companies do not pay claims.

Insurers do pay claims. In fact life insurance companies pay out almost $10 million every working day in claims to customers². This figure would be even higher if the Australians had adequate levels of cover.

2. Source: http://www.lifewise.org.au and IFSA analysis based on APRA data and Risk Store data 2007

Review of Insurance

If you have existing insurance we are happy to review this for you to determine whether it is still appropriate for you and your family. In this process, we will advise you the likely changes in premium over time.

If you would like more information, please Contact Us.