Are you and your family protected?  FACT: 95% of Australians don’t have enough insurance.

A research commissioned by Lifewise about understanding the social and economic cost of underinsurance shares some very interesting facts:

  • 95% of families do not have adequate levels of insurance;
  • One in five families will be impacted by the death of a parent, a serious accident or an illness that leaves a parent unable to work; and
  • The typical Australian family will lose half or more of their income following a serious illness, injury or the loss of one parent as a result of underinsurance;

There are many factors affecting the level of insurance cover you need. Here are some questions you’ll need to answer:

If you were to become injured and had to stop working, how long could you keep your lifestyle and how will you pay your bills?

  • If the worst case scenario happens and you pass away, who would repay your debts? What sort of lifestyle would your family have?
  • If you were to have an accident and were unable to run your business, how would you cover your business expenses?

Let’s take income protection as one example of many options.

Income protection insurance pays an income to you if you are unable to work due to an accident or illness.

The income is usually 75% of your pre-disablement income and is payable after a “waiting period”.

You select the waiting period to suit your needs – for instance, if you had a lot of unused leave you could choose a longer period.

Income protection is particularly valuable for self-employed people, casual workers or anyone else who relies on their income but has no sick leave.

You will be required to provide evidence of your usual income when taking out a policy.

The income will be paid until you recover and return to work or for a “benefit period” – this can be as short as one year or up to age 65. Some policies pay a rehabilitation benefit to help ease you back to work. Read more on Income Protection: Protecting your biggest asset here.

Once you’ve started painting the picture of your family’s future and the costs involved in raising a family and reaching your goals, you’ll start to get an idea of how important insurance is to cover those needs.

Need some help? Talk to a financial planner who can recommend a solution to suit you.

Image courtesy of Shutterstock.com
IMPORTANT INFORMATION: The information and opinions contained in this article are of a general nature only and does not take into account the investment objectives; financial situation or particular needs of any individual or entity and does not constitute specific or personal advice. The information and opinions herein do not constitute any recommendation. No financial product or financial service should be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances.  Information, forecasts and opinions contained in this article can change without notice. Although care has been exercised in compiling the information contained within, Modoras Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. This article has been prepared by Modoras Pty. Ltd. ABN 86 068 034 908,  AFSL 233209.

  • it sounds good to have in that scenario. better to be safe and insured

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  • We have home, contents and car insurance. Are currently looking into insuring ourselves in case we can’t work

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  • Good knowledge to know! Thanks for sharing this!

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  • I don’t have insurance, and honestly don’t see the point, money isn’t a fix all, and usually saving works out better.

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  • good advice but i dont even have a job at the moment so…. gotta work on that first

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  • Insurance, please do not underestimate the importance, I know with the current pressures of having to pay bills and feed a family it can be difficult, if you work a lot of income protection, death and disability insurance can be paid thru super contributions, this can be very effective, however make sure you read the fineprint on the super forms, If there is only one bread winner in a home it is vital to cover at least that person, however my neighbour who was a stay at home mum passed unexpectedly leaving 2 school age boys, the husband has to stop work to care for the children and the effects were devastating, The other one is house and contents, if u rent contents insurance Is not that expensive, can be paid weekly and reduces massive stress if something should happen, It is something we do not want to speak about and we certainly do not want to use but in the event of a disaster it is vital, do your best, some insurance is better than nothing.

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  • Lots to think about. Thanks.

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  • it is a very important thing to have

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  • It is always too late after the event to wish that you had found the money to insure yourself

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  • We used to have very little but when the twins came along…. I got heaps and so did hubby… and I guess when they are all grown up we might stop the life cover…. not something you like to think about, but we do know families who have lost a parent and that made us realise how valuable it is.

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  • No-one likes to pay for insurance but its just one of those essential things you can’t risk not having.

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  • we are covered for absolutely everything, our premiums are high but i think its worth the peace of mind

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  • I’m fine thanks for sharing though.

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  • e have insurance so important highly recommend

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  • I agree that income protection insurance is very important.

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