New Financial Year

Insurance for your peace of mind
August 2009

Significant research has been conducted in recent years that highlights the gross underinsurance of Australian households.

International research from reinsurer Swiss Re in 2007 found Australia is one of the most underinsured nations in the developed world1.

However some progress is starting to be made.
According to a 6 August 2009 media release from the Investment and Financial Services Association Limited (IFSA), new figures from actuaries and researchers Plan for Life shows a 24.5% increase in risk cover sales for the year to March 20091.

According to Plan for Life, factors which have lead it an increase in cover included the active housing market and ongoing innovation in new insurance products.

You may have insurance, but do you have enough?
83% of Australians insure their car, but only 31% protect their ability to earn an income with Income Protection insurance.

Research commissioned by IFSA in 2005 shows only 4% of families with dependent children have adequate levels of insurance cover2.

If any of the following factors apply to you, you could become one of those statistics and may not be able to meet ongoing expenses or provide for your family:

taken on debt—whether you’re refinancing your home loan or borrowing to invest, you need to be able to meet your obligations should you be unable to earn an income
changed jobs or been promoted—any changes in income should be reflected in your insurance to maximise your payments in the event of the unexpected, or
started a family—if your family situation has changed, you’re likely to have increased expenses to meet and a greater need to provide for your loved ones.

Although your superannuation may provide some life and income protection insurance, waiting periods and limits could mean it’s not enough for your circumstances.

Rice Warner Actuaries estimate that insurance cover within super is on average only 20% of what is needed.

So if your circumstances have recently changed, or you think your friends or relatives should be better protected, take the time to look into it further, contact us.

Sources

1 The Investment and Financial Services Association Limited. www.ifsa.com.au. Accessed 11 August 2009.
2 Lifewise. www.lifewise.org.au. Accessed 11 August 2009.