Research studies continue to point to the fact that Australians are under-insured, especially when it comes to life insurance. The stats reported by James Dunn in the Australian are alarming. For example:
1) The Financial Services Council points out that only 5% of parents living in Australians with dependent children have “adequate levels” of life insurance cover.
2) For those that have insurance cover, insurance industry studies have revealed a typical family has only 56% of their income covered by life insurance in the event of the main breadwinner’s death. The recommended level is 80%.
3) It’s also been reported that less than one-third of Australians have any income protection insurance, despite Australian Bureau of Statistics figures showing that more than 3 in 4 will be diagnosed with a serious illness during their working life.
Many Australians think they are well covered because they have a life insurance offering in their superannuation fund. However CANSTAR CANNEX’s Head of Wealth Management Stephen Mitchell, says that’s not enough.
Mitchell says, “Obviously some coverage is better than no coverage, but the default coverage in super funds is low-level, and it’s one-size-fits-all. People think they are covered when they’re not.”
Mitchell says life insurance is a “jigsaw puzzle”, with four main pieces: death cover, total and permanent disability (TPD) cover, trauma cover and income protection. How the pieces fit together is the main thing, he says.
It makes sense to get solid advice from a life insurance broker.
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