Consequences can be severe
The consequences of not having sufficient life assurance can be disastrous, Peter Dempsey, deputy chief executive of the Association for Savings & Investment SA, says.
For households, insufficient assurance may mean having to sell the family home or a car, or a drastic reduction in their living expenses. If these measures do not make up for the lost income, the surviving adult will have to find ways of earning an extra income.
Dempsey says it is not easy to quantify the effect of insufficient life assurance on the economy. However, the loss of every income earner has the potential to reduce the financial well-being of a wider group of people and, ultimately, this affects the country as a whole.