At least one in five of us will be unable to work due to injury or illness in our lifetime, yet we’re still more likely to insure our car than our most important asset–ourselves.
You might have the attitude ‘she’ll be right’ but looking at the statistics, there is more chance of something going wrong than you might think.
Over 80% of Australians insure their car but less than a third of us have income insurance should we have an accident and be unable to work1.
How invincible are we really?
It’s estimated that at least one in five Australians between the ages of 21 and 64 will be incapable of working at some point due to an unforeseen accident, injury or illness2.
Despite this, almost 95% of the population is underinsured, meaning we could be setting ourselves up for real financial difficulties should something happen3.
Here are some national figures to put it into perspective:
- Every year 236,000 people of working age suffer a serious injury or illness4
- 18 families in Australia lose a working parent every day of the week5
- 50,000 Australians have heart attacks every year6
- One third of women and a quarter of all men are diagnosed with cancer7
- More than 1,600 people die on Australian roads every year, most aged 26 to 598
- A stroke occurs every 12 minutes across the country9.
Debunking the myths
The national Lifewise campaign set the record straight on a number of misconceptions believed to be part of the reason behind why Australia is underinsured as a nation. These include:
- The government will look after me if something happens Centrelink pays benefits, but it might not be enough to cover your current lifestyle.
- Workers’ compensation will cover me This only covers incidents that occur during work hours or illnesses that are a direct result of your employment.
- Life insurance is not affordable For most Australians insurance is affordable and can be paid via monthly premiums. If you want a quick estimate, AMP’s online calculator can help you crunch the numbers.
- Life insurance companies don’t pay claims Insurers pay out almost $10 million every working day in claims.
- I’ve already got enough insurance Research shows 60% of families with dependent children don’t have enough insurance to cover household expenses for a year if the family bread winner were to pass away.
What types of cover are available?
Insuring yourself and your income can allow you to maintain your lifestyle and living arrangements, and give you comfort in knowing you can still meet your financial commitments—things like mortgage, rent, card repayments, bills, kids’ education fees, and treatment and rehabilitation costs should you need it.
You can buy different forms of personal insurance through your super fund or via an insurance company. Here’s a rundown of the four main types of cover available:
- Life insurance pays a lump sum on your death or the diagnosis of a terminal illness
- Trauma insurance pays a lump sum on the diagnosis or occurrence of a specific illness
- Income protection provides a replacement income of up to 75% of your regular income if you’re unable to work due to illness or injury
- Total and permanent disability (TPD) pays a lump sum if you become disabled and are unable to ever work again.
What AMP’s doing in this space?
In 2014, AMP paid more than $887.6 million in claims across its life, trauma, income protection and TPD policies. The age range of those making a claim varied from six years old to 88 years old.
The important thing to understand is why insurance might be necessary for your situation, whether that includes a partner or children, and how much you need so you are not under or over insured.
Speak to us today.