You might have the attitude ‘she’ll be right’ but looking at the statistics, there is more chance of something going wrong than you might think.
Over 80% of Australians insure their car but less than a third of us have income insurance should we have an accident and be unable to work (1).
How invincible are we really?It’s estimated that at least one in five Australians between the ages of 21 and 64 will be incapable of working at some point due to an unforeseen accident, injury or illness (2).
Despite this, almost 95% of the population is underinsured, meaning we could be setting ourselves up for real financial difficulties should something happen (3).
Here are some national figures to put it into perspective:
- Every year 236,000 people of working age suffer a serious injury or illness (4)
- 18 families in Australia lose a working parent every day of the week (5)
- 50,000 Australians have heart attacks every year (6)
- One third of women and a quarter of all men are diagnosed with cancer (7)
- More than 1,600 people die on Australian roads every year, most aged 26 to 59 (8)
- A stroke occurs every 12 minutes across the country (9).
Debunking the mythsThe national Lifewise campaign set the record straight on a number of misconceptions believed to be part of the reason behind why Australia is underinsured as a nation. These include:
- The government will look after me if something happens - Centrelink pays benefits, but it might not be enough to cover your current lifestyle.
- Workers’ compensation will cover me - This only covers incidents that occur during work hours or illnesses that are a direct result of your employment.
- Life insurance is not affordable - For most Australians insurance is affordable and can be paid via monthly premiums.
- Life insurance companies don’t pay claims - Insurers pay out almost $10 million every working day in claims.
- I’ve already got enough insurance - Research shows 60% of families with dependent children don’t have enough insurance to cover household expenses for a year if the family bread winner were to pass away.
What types of cover are available?Insuring yourself and your income can allow you to maintain your lifestyle and living arrangements, and give you comfort in knowing you can still meet your financial commitments—things like mortgage, rent, card repayments, bills, kids’ education fees, and treatment and rehabilitation costs should you need it.
You can buy different forms of personal insurance through your super fund or via an insurance company with the help of a Financial Adviser. Here’s a rundown of the four main types of cover available:
- Life insurance pays a lump sum on your death or the diagnosis of a terminal illness
- Trauma insurance pays a lump sum on the diagnosis or occurrence of a specific illness
- Income protection provides a replacement income of up to 75% of your regular income if you’re unable to work due to illness or injury
- Total and permanent disability (TPD) pays a lump sum if you become disabled and are unable to ever work again.