Australians are underinsured, a serious problem facing the entire country

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Although it is a topic few are comfortable discussing, when an unexpected illness, injury or death of a loved one occurs and your personal insurance is insufficient to cover all related expenses, the emotional damage compounded by the financial implications can range from stressful to catastrophic. .

Only four per cent of Australia’s total population with dependent children have adequate insurance to protect themselves and their family. A group of studies published by the Investment and Financial Services Association (IFSA) on claims paid by 13 life insurance companies found that average payments were significantly lower than the financial needs created by incurred losses.

Few Australians have the financial resources to cover the expenses of life’s unexpected hazards, yet many do not have a plan to protect their financial security and lifestyle in the event that the source of income suddenly fails. work due to illness. , injury or death.

Multiple coverage insurance – that is, coverage that includes life insurance, income protection insurance, trauma insurance (also called critical illness insurance) and disability insurance – is not a priority for many Australian households and, without However, having multiple coverage insurance is essential for good financial planning.

In an economy that has many struggling to make ends meet, insurance is often seen as an unnecessary expense, as many Australians take a “she will be right” approach to planning for the future. The truth is that multiple coverage insurance is vital to financial security, but unfortunately for many, this finding is not met until it is too late.

Financial planning isn’t just for the rich. It is an important process that identifies our financial goals and long-term objectives, and charts how we intend to achieve those goals and objectives. Part of sensible financial planning is identifying those vehicles for protection, wealth creation, life milestones, and contingency plans. Once implemented, a person’s financial plan, including multiple coverage insurance, should be periodically reviewed to match their needs at each stage of life, adjusted to remove items that are no longer needed by incorporating new requirements.

How do you determine the level of multi-coverage insurance you need to make sure your family and lifestyle are safe when the unthinkable happens? To compare multiple coverage insurance plans, it is important to know what coverage you need to meet your needs and those of your family.

For example, a working couple in their 30s with two young children may need to plan benefits for 10-13 times the value of their taxable earnings in case their earnings are suddenly cut off due to death or disability. So if you earn a full-time salary of $ 50,000, this translates to $ 500,000 to $ 600,000 in life insurance coverage to protect your family’s lifestyle in the event you lose your life.

Parents in their 40s who work full time earn $ 50,000 per year, with older children at home may need life insurance coverage in the $ 300,000 to $ 450,000 range. This varies and your personal situation and needs should be discussed with a licensed insurance specialist.

Many people live their lives with the attitude that “it won’t happen to me” until something happens. This reflects a serious lack of awareness of the effects that an unexpected death, injury or illness can have on a family. Very few Australians have taken the time to learn about the true costs of multiple coverage insurance, often because they mistakenly perceive it to be prohibitively expensive. Compounding the problem is the perception that insurance is too complicated and the basic discomfort most people feel when it comes to talking about losses and mortality. They simply choose not to think about it.

Trauma insurance pays a lump sum of money in the event of a serious illness or condition, such as a heart attack, cancer, stroke, loss of limb, paralysis, or other medical event described in the policy. The average age of Australians experiencing traumatic medical conditions is 42. With injury insurance in place, you can count on financial coverage during the recovery period for you and your family. Trauma insurance pays upon receipt of a diagnosis, or within a week or two of surviving an injury or illness that has left you disabled, depending on the provider.

When a medical event leads to total and permanent disability, disability insurance will provide a lump sum benefit of up to $ 5 million to help you meet your financial responsibilities. Disability coverage can also help with any adjustments you need to make to deal with the circumstances resulting from the disability, such as rehabilitation, therapy, and any special equipment you may need.

Income protection insurance is designed to protect your income in the event that you are unable to work due to illness or injury. Consider the impact the loss of your income would have on your family if you were suddenly unable to work. Income protection insurance alleviates worry about paying bills and putting food on the table.

Multiple coverage insurance is tailored to the specific needs of each individual and family, and should be reviewed periodically with a licensed insurance specialist to ensure that it continues to meet your needs.

Underinsured Australians are at serious risk. Multiple coverage insurance cannot prevent a tragedy from happening. What you can do is provide financial support for you and your family to survive if you can no longer work. Your assets are better protected, your living costs will be easier to cover, and your family will be spared the agony that occurs when the loss or injury of a loved one worsens due to the financial crisis.

MultiCover is a referral service and not a financial service provider. The information on our website and other documentation is only of a general nature and does not take into account your personal financial situation, needs or goals. None of this information is, nor shall it be considered to constitute financial or other advice for the purchase of a product or service. We strongly recommend that you obtain professional advice before purchasing any insurance product and / or service. Please see our Site Terms and Conditions and Privacy Statement for more information.

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