A majority of Australians are significantly underinsured, with only 55 per cent of adult Australians having some form of life insurance; leaving a further 7 million adult Australians with no life insurance cover at all.
Research shows that 60% of Australian families with dependents will run out of money within 12 months if the main income earner dies. “Research commissioned by IFSA in 2005 showed that only 4% Australian families with dependent children have adequate levels of insurance cover. This means that Australian families are critically underinsured to the tune of $1.37 trillion.”
According to Financial Services Council research it found three reasons Australians lacked life insurance: “accessibility, affordability and trust.”
While most Australians have car and home insurance, life insurance on the other hand is seen as too expensive, too complicated and most regard insurance providers with skepticism when it comes to paying out claims.
While affordability is the significant factor cited as the reason Australians lack life insurance cover, 61% over estimate the cost of life insurance premiums. In fact life insurance is more affordable than people realize. “The monthly premium for a 35 year old male, non-smoker applying for $500,000 life cover would be approximately $30 and a 35 year old female, non-smoker applying for $500,000 life cover would pay a monthly premium of $25.”
Australians’ general lack of understanding and awareness of life insurance doesn’t stop them from worrying about the financial costs of a serious illness, injury or death. Unfortunately their concerns about the financial risks of illness, or death still does not convert them to purchase life insurance.
While the perception that life insurance is unpleasant or difficult to discuss, it is an important area to address. Without life insurance to provide a financial safety net, you can very quickly run down your savings and face financial difficulty.
The cost of not having life insurance can have far greater consequences in the long term for you and your family.
Quoted information sourced from facts-about-the issue at www.lifewise.org.au
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