GET LIFE TOGETHER
LIFE insurance is a product people hope to never use, especially death cover or total and permanent disability cover.
Canstar says only about one-third of working age Australians have life insurance and we are underinsured by $1.8 billion.
The two other planks of life insurance are income protection, for when you can’t work, and trauma cover, which pays out for critical illnesses like cancer or heart attacks.
Lifewise.org.au says three quarters of Australians will suffer a serious illness during their working lives.
Much of Australians’ insurance cover is a default option held in their super fund, and is usually not enough to repay debts and provide enough funds for a family to survive without its main income earner.
“Probably 90 per cent of people don’t have adequate insurance,” said JBS Financial Strategists’ Glenn Malkiewicz. “They think it’s probably not going to happen to them — and in most cases it won’t — but when it does the financial impact is huge.”
Work out the level of cover you need with an online calculator or via a financial adviser.
Mr Malkiewicz said a quick review could save money by: Comparing it with other deals; Working out whether the level of cover could be reduced once debts have been repaid or children have almost finished school; and
Switching stand-alone policies into super to reduce costs.