Five Myths About Insurance

Australia is suffering an underinsurance epidemic driven by misconceptions about life insurance: that it’s too expensive or too complicated. But life insurance should be as integral a part of your family’s financial planning as other forms of financial protection. After all, you would be unlikely to insure your car to only half its value. So why do so many Australians have less than half the life insurance cover they need?

It’s important for your family’s financial wellbeing that you base your decisions on facts rather than myths.

MYTH 1 : I HAVE ENOUGH INSURANCE INSIDE MY SUPERANNUATION

The minimum level of cover provided by your super fund is set with all members in mind and therefore may not be enough to cover your financial obligations. Make sure you contact your super fund to find how much cover you actually have and whether it’s sufficient for your requirements.

MYTH 2 : I DON’T NEED INSURANCE THE GOVERNMENT WILL LOOK AFTER ME

This would be nice but it’s not necessarily the case. Centrelink pays a maximum disability pension of $716.10 per fortnight for singles and $539.80 (each) for couples.
Would this cover your current lifestyle?

MYTH 3 : LIFE INSURANCE IS NOT AFFORDABLE

For most Australians, insurance is very affordable. For example, the typical monthly premium for a 35-year-old male non-smoker applying for $500,000 of life insurance cover would be approximately $30, while his female counterpart would
pay approximately $25. That’s peace of mind for less than the cost of a coffee a day. And if you have some existing cover, increasing this to adequate levels will cost you even less.

MYTH 4 : LIFE INSURANCE COMPANIES DON’T PAY CLAIMS

Life insurance companies pay out almost $10 million every working day in claims to customers. This figure would be even higher if Australians had adequate levels of cover.

MYTH 5 : MOST PEOPLE HAVE ENOUGH INSURANCE

Unfortunately, this isn’t the case. In fact, research shows that 60 per cent of families with dependent children do not have enough insurance to cover the household expenses for a year if the family breadwinner were to die. And on average, those who have death cover through their super policy have less than half the level of cover they need.

To help you determine the level of cover that suits your needs, please make an appointment with our office today.

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