Nowadays, insurance is a huge market, and an increasingly growing one. With so many different types of insurance on offer, it’s no wonder that many people feel the need to prioritise those kinds of insurance that have immediate benefits. For example, any person who owns a car is already legally obligated to have Compulsory Third Party Insurance (CTP), and singles, couples and families alike make great use of the extras cover on their health insurance. Home and contents insurance is similarly important for those wishing to protect probably their biggest purchase (home) and any possessions of sentimental and/or monetary value. Amidst these more pressing types of insurance, it can be easy for life insurance to fall by the wayside. However, you might be surprised to discover that life insurance is actually more crucial than a lot of people would initially think. How so, you ask? Keep reading to discover these need-to-know facts about life insurance in its many forms.
Did You Know? Most Australians don’t place significant value on their ability to earn an income.
According to a study conducted by AAMI and TNS/IFSA Investigating Income Protection Insurance, 83% of Australians say that they have car insurance, yet only 31% of Australians have invested in income protection insurance. Consider this: how long would you be able to support yourself if you had to forgo your income? When people consider the idea of life insurance, often they immediately think of only one type of life insurance: life cover, which provides a lump sum payment to a person’s family after his or her death. However, income protection may be just as, if not more, vital for those who rely on their steady income to fund their day-to-day life, pay off their mortgage and other major bills, and supplement their savings.
Did You Know? Over 95% of Australians do not have adequate levels of life insurance.
This study, conducted by Lifewise in 2010, reveals that an overwhelming number of Australians are unprepared for the events of the future. If anything were to happen that would jeopardise their ability to earn an income, such as suffering an unexpected long-term injury or illness, the majority of Australians would be unable to support themselves and/or their family. The results of the study showed that its Australian participants only scored 24 out of 100 when it came to having different forms of life insurance (including life cover, total and permanent disability cover, income protection and trauma/illness cover) that would protect them for the future.
Did You Know? The average Australian family needs to put aside approximately 35.2 percent of their income to pay for their mortgage payments, and it also requires roughly $310 a week to bring up two children.
If you’ve been working for a long time, it can become easy to take your income for granted. It can be equally easy to not anticipate, or to simply ignore, the possibility of any accidents or injuries, whether in the workplace, at home or on the roads. However, when it comes to life insurance, it’s important to think of your family as well as yourself. If you share living costs with your partner, or if you’re living in your own home with your children, it’s a good idea to sit down and calculate the weekly or monthly amount that your lifestyle costs you. This will allow you to consider whether or not you could afford to keep paying this much if any unfortunate incidents were to arise. Even if you have a nest egg, being out of action at work for a few weeks or months could put a serious dent in your hard-earned savings.
The Final Word: Look Out For The Future
While it’s never pleasant to consider that you might be unable to financially support yourself or your family in the future, it is necessary to do so to ensure that you’re well prepared for any eventualities. Whether you want to invest in income protection to possibly stand in for your contribution towards the family bills, or you want to take out life cover to support your partner and children after you’re gone, the choice is yours. There are different types of life insurance to suit every kind of lifestyle, and comparethemarket.com.au can help you to look at your options and may find the best fit for you.
This advice has not taken into account your financial needs. Because of that you should consider the appropriateness of this advice in regard to your financial needs and consider any relevant product disclosure statement before making a decision to purchase a financial product.