Insurance – Who Needs It?

Insurance – Who Needs It?

Many Australians simply don’t have enough insurance, and some have none at all. It’s a worrying thought when you consider the following statistics:

  • 6 out of 10 Australians with dependent children don’t have sufficient life insurance cover to care for their families for more than a year if they were to die^.
  • 96% of their families lack enough life insurance to protect them for 10 years or more^.
  • As many as 80%* of homeowners in Australia may not receive a big enough insurance payout to rebuild their homes if they were destroyed

Many people think they’ll receive financial assistance through Workers Compensation, their health fund, or the Government in the event of injury or illness.

While some assistance is available, it is important to understand that there may be limits which can have a significant impact on your lifestyle. Here are some things to think about:

  • Workers compensation offers important financial protection against work related injuries. But it doesn’t cover injuries that happen away from work, or provide protection against serious illnesses like cancer and heart attack.
  • While there are a range of social security payments to assist people with illness, injury or disability, the amount you are eligible for may not cover your medical and living expenses.
  • Private health insurance can help cover a range of medical expenses, but it doesn’t help you with your everyday living expenses – like household items or mortgage repayments. Health claims are also often capped, which may leave you with a gap in your medical expenses to cover.

If you are an employee, chances are you have some life insurance cover through your super fund. But the level of cover provided through your super fund is often a conservative estimate based on your salary. It doesn’t take into account your level of debt, or the number of dependants you have – factors which are crucial to determining your insurance needs. So it may not be enough.

You should be able to find out your current level of cover by checking your super statements, calling your super fund, or asking your employer.

It’s a fact: Serious illness or injury does not discriminate between gender, age, income or occupation. No matter what you do for a living you have just as much chance of becoming ill or injured as everyone else.
Now imagine for a moment what would happen if you were to suffer from a serious illness or injury. Think about how long you would be able to:

  • continue your mortgage repayments
  • continue to pay off your other personal debts
  • fund your everyday living expenses e.g. electricity, gas, phone, groceries.

If you are like most Australians you would probably struggle after just a few weeks or months. It’s unfortunate, but the bills won’t stop coming if you have to stop working.
Apart from life insurance, what should I have?

Income Protection
Income protection pays up to 80% of your income if you can’t work because of sickness or injury.

Previously, those who were in more hazardous or unconventional occupations have been unable to qualify for Income Protection Insurance. Income Protection insurance pays a monthly payment of up to $3,000 should you suffer a serious illness or injury that prevents you from performing everyday living activities. Payments can continue until you turn 80 and the best part is – the premiums are tax deductible.

Trauma Cover
Most of us know somebody who has been diagnosed with cancer, suffered a heart attack or experienced a stroke. Whether it was a relative, friend, or colleague, these events remind us that no matter how healthy a lifestyle we lead, no-one is guaranteed good health and a long life.

Now, if you were unlucky enough to suffer a serious illness or injury, would you like to be provided with a lump sum of money? Money that could be used to pay your medical expenses, mortgages, personal debts or even to make a permanent lifestyle change such as reduced working hours.

I’m certain your answer is yes. After all, you would want to concentrate on getting better – not on how you’re going to pay the bills.

Trauma insurance can provide you with a lump sum payment on the diagnosis or occurrence of up to 55 conditions including cancer, heart attack and stroke.

Whilst insurance can’t prevent serious illnesses and injuries from occurring, it can protect you and your family from the financial consequences such misfortune can bring.

Would you like more information? Click here.

Scotia Online CIBC Online