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.