Australia's need for insurance

10th Dec, 2012

Australia's need for insurance; Our  $3.1 trillion problem!

A recent report by CommInsure highlighted the nations worsening consumer attitude towards life insurance and the ever increasing underinsurance problem.

Some of the key findings from this report included:

  • Australians are currently underinsured by a whopping $3.1 trillion;
  • Only 56% of Australians  have some form of life insurance of which only 65% only have the 'default' level of life insurance available in their superannuation fund. This means, the majority of these people have insufficient cover!
  • Young Australians and low income households have the highest underinsurance rate out of all age and socio-economic groups.
  • 7 in  10 Australians know someone who has suffered a critical or terminal illness (trauma event) yet only 8% have this type of cover themselves;
  • 1 in 6  working males aged 35-65 will likely suffer a disability which leaves them unable to work for six or months; and,
  • The average weekly Centrelink Disability support pension is less than $350 yet more than half of Australians would have to rely on Centrelink benefits if a family member suffered a critical illness or passed away.

While most of us wouldn't dream of  leaving home in a car without motor insurance, or  living without home and contents insurance, less than a third of Australians consider it is important enough to insure our most important asset; our ability to earn an income!. Yet every day, over 65 Australian Families are impacted by an event that seriously affects their ability to earn an income

So why is this still such an ongoing problem? Why do we continue to such have reservations towards personal insurance when we are in desperate need for it?CommInsure 's report also revealed the poor consumer attitude and behaviour:

  • After a near- death incident 46% of Australians are more likely to go on a holiday than get insurance (only 34%);
  • The top 3 reasons Australian's will  take out extra cover are when a mortgage is taken out, on the encouragement of friends or family, and on the birth of a child;
  • Many Australians believe they will never be affected by a serious illness or injury and therefore don't see the need for cover (Particularly those blessed with good health and youth!);
  • Australians still believe personal insurance is expensive and thus only choose to hold a minimal level of cover yet for less than $30 a month,  a non-smoking 35 year old male can received $500,000 life cover;


What's more alarming is that every working Australian has a 1 in 3 chance of becoming disabled for more than three months before turning  65 .  To support ourselves, most of  us will rely on existing savings, selling our assets and government hand outs. The remainder will be faced with severe financial hardship if they (or their loved ones) were to have an accident, become sick or die.

This reality can have disastrous consequences for the everyone concerned. This type of financial burden coupled with the feelings of loss, guilt and intense personal pressure can often lead to family and personal breakdown.

Can you really afford not  to  have insurance?

At The Wealth Creation Group we are committed to providing you with  sound insurance advice to protect your assets, your family and your lifestyle in the event of death, sickness or injury. Talk to us today about securing your financial future through appropriate personal (and key person) insurances.

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Swiss Re Economic Research & Consulting 2077
Source: First-time ever figures, Media Release 2 March 2010, Investment and Financial Services Association.
Source: Interim Report of the Disability committee, Institute of Actuaries of Australia, 2000).

Disclaimer

This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.  Opinions constitute our judgments at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Nathan Griffith, Samina Yip and Frank McCall of The Wealth Creation Group Pty Limited are Authorised Representatives of Apogee Financial Planning Limited ABN 28 056 426 932, an Australian Financial Services Licensee, Registered office at 105 –153 Miller St North Sydney NSW 2060 and a member of the National Australia group of companies. 

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The Wealth Creation Group and its Financial Advisers are Authorised Representatives of WCG Financial Solutions Limited, Australian Financial Services Licensee 481610, Registered Office at 351 Moorabool Street, Geelong VIC 3220.
Disclaimer: The information contained in this website is of a general nature and has been sourced on good faith as such it should not be construed as personal advice. Whilst the writer has adopted care, diligence and competence, the information has not been prepared taking into account any particular investment objectives, financial situation or particular needs. The Wealth Creation Group and WCG Financial Solutions Pty Limited accept no responsibility for any content contained in external links on other company websites or externally sourced information.