Australia is one of the most underinsured nations in the developed world ranking 16th for life insurance density and penetration1.
Research has consistently shown Australians don’t take out adequate levels of insurance to protect themselves and their family. In fact, research commissioned by IFSA in 2005 showed parents with dependents were critically underinsured by $1.37 trillion. Thinking of that another way – only 4% of the total population with dependent children have adequate levels of Life Insurance cover.
While most people would never consider driving a car without motor insurance, less than a third of us insure our most important asset – our ability to earn an income.
Why is this a problem? More than three in four Australians will be diagnosed with a serious illness in their working life2. The majority of us will rely on savings, selling assets in a depressed market or government welfare. And a significant proportion of Australians would face financial hardship if they were to have an accident, become sick or die.
This reality can have tragic consequences for the individuals involved and their families. Financial burdens at a time of intense personal pressure often lead to family and personal breakdown.
The effect on these people is not just immediate – it can be generational.
1 Swiss Re Economic Research & Consulting , 2007
2 ABS Statistics
Source: Lifewise
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