Australian - Under-Insured

AUSTRALIANS are putting themselves at great risk by failing to take out insurance to protect their families if they become sick, injured or die. A study has found women fail to plan their insurance cover before starting a family, and many do not have a policy for themselves or their partner. The Westpac Women Insurance Survey, to be released this week, reveals six out of 10 women find insurance complicated and do not have life insurance cover.

Because superannuation has a component of insurance in there, people think their families are covered and that's not right. Insurance just keeps getting put aside because they feel it's too complicated and too expensive.

 

There are several types of insurance that can cover policy holders at critical times, including life cover, total and permanent disability cover, trauma cover and income protection. 95 per cent of Australians do have adequate insurance.

Annalise Law, managing director of marketing services company The Kanga Group, was diagnosed with thyroid cancer at 24. The 35-year-old says her decision to take out trauma insurance, which pays a lump sum in the event of a critical illness, helped her get through the ordeal. She received a one-off payout that helped her during her recovery.

"Literally 90 days after I took out trauma insurance, I found out I a lump in my throat," Law says. "If you have dependents or assets, you must have life insurance. If you are leaving behind a spouse or children, you don't want them to be grieving you and they are worried about finances."

The Westpac survey found 26 per cent of respondents without cover say they could not afford the premiums. However, people can often increase their life insurance cover within their super fund, with the premiums effectively paid by their employer contributions instead of their household budget.

"About 83 per cent of Australians will insure their cars but only 23 per cent will insure their ability to earn an income. When you look at the value of a car, it might be $30,000 but an income might be worth millions over your life."