Compare your
insurance
When is the last time you looked at your Insurance
According to Rice Warner’s Underinsurance
in Australia 2017 report, it estimated that of the 94%
who had
a level of life cover, had the median cover amount which was approximately $143,500. This is around
twice the median household income. It suggests the amount required to be adequately covered is around
eight times the family income.
The number of Australians with Total and
Permanent Disability (TPD) cover and income
protection (IP) is
significantly lower than life cover and Rice Warner reported this was due to most people holding life
insurance cover through their superannuation, and some funds not offering TPD or IP as a default.
While default
life insurance through super can be an effective way to ensure most working
Australians
have a degree of cover, and in some cases may be cheaper, it isn’t a tailored product and therefore you
could find yourself underinsured. Retail life insurance can provide clients with more certainty at claim
time and can still be paid using superannuation funds.
The default amount you will be covered for within a life insurance policy through your superannuation is
often lower than the cover you can get if you choose a tailored, standalone product. Life cover in super
is typically only for relatively small amounts (though you can opt to increase your cover), with
financial research firm Rice Warner stating in its Underinsurance in
Australia 2020 report that
the
median default life insurance cover within super meets “approximately 65% to 70%” of the basic cover
needs of average households, “but a much lower proportion” for parents with dependent children.
Please consider reviewing your current cover in your super or setting up a new policy to mitigate any
risk of losing your family home. Generally speaking, most people don’t bother to read the PDS of their
cover inside their super and aren’t aware of what they are covered for if they needed to make a claim.
If you had a financial planner set your insurance up previously, why not compare your current policy and
make sure you’re not paying too much?
Our partner, Life Insurance Direct, is a FREE, no obligation, General Advice life insurance broker. They
will be able to set up a new policy (Inside super, SMSF or out of pocket) or review your current one to
make sure you understand just what cover you have and ensure you’re getting a competitive price. They
will NOT be able to provide any personal advice on what or how much insurance you need, they are general
advice only. So do your research and get a quote by clicking the link below.
Types of Insurance
- Life Insurance Buying life insurance protects your spouse and children from the potentially devastating financial losses that could result if something happened to you. It provides financial security, helps to pay off debts, helps to pay living expenses, and helps to pay any medical or final expenses.
- Total and Permanent Disability (TPD) Insurance Most people need every bit of their income to support themselves and their families. Even when you’re young and healthy, accidents can happen at any time, and being physically fit does not always equate to being medically fit. Total and permanent disability (TPD) insurance generally pays you a lump sum benefit when you are unable to work because of an injury or sickness and meet the insurer’s definition of total and permanent disablement. This once-off cash benefit can be used to pay for your medical treatments, eliminate debts and fund permanent lifestyle changes.
- Income Protection Income Protection Insurance Australia When you have a family, are paying off a mortgage, or have older parents who rely on you, your income is often one of your most important assets. Should you become ill or are injured and unable to work for some time, income protection insurance in Australia could help you continue to provide financial support to the ones you love most while you recover
- Trauma Critical Illness Insurance gives you financial freedom if you become critically ill or injured and require extensive medical treatment to recover your health. A lump sum payment from your Critical Illness Insurance policy gives you the financial security in the worst of times. It allows you the financial freedom to access the best medical treatment available, pay for your rehabilitation, and cut back on your work hours to concentrate on your recovery.
- What is Life Insurance?
Life cover is designed to provide you and your family with financial security in the event of your death. You need life cover when You want to protect your household income: A life policy can be used to replace lost income, by supporting the spouse left behind in maintaining their standard of living.
- What is TPD insurance?
TPD is a type of insurance that provides you with financial support in the form of a lump sum benefit, should you become totally and permanently disabled due to an illness or accident, and a medical professional has certified that you are unlikely to ever work again, either in your own or any occupation reasonably suited to your education training or experience, depending on your policies definition.
- What is income protection?
Income protection insurance is generally a type of life insurance policy. Suppose a medical professional declares that you are unable to work for longer than the waiting period. In that case, this type of policy typically pays a monthly benefit of up to 70% of your regular before-tax income when you can’t work due to illness or injury. Generally, you’ll be able to use this benefit to continue managing your financial obligations.
- What is Trauma Insurance?
Trauma insurance is a type of life insurance policy that provides you with a benefit. Generally, you’ll be able to use the paymentfor financial support if diagnosed with a critical illness, as defined by your insurer in your Product Disclosure Statement (PDS). You can use the benefit to help pay medical expenses, cover any loss of income and provide for your family while you recover.