By Ashley Davidson
When it comes to personal insurances, Australians are relatively relaxed about their situations. The old “she’ll be right mate”comment gets thrown around and is sometimes not just a throw away comment!
It’s an endearing trait of ours but one that simply doesn’t cut it when things do go a little pear shaped. And, as we all know…things go pear shaped all the time!
So the massive under insurance problem in this country simply rolls on with many, many thousands of hard working Aussies remaining at risk!
A huge number of Australians rely heavily on their super fund to provide some sort of cover if they were killed or become seriously disabled. These are more often than not an Industry super fund such as AustralianSuper, VicSuper, REST, Hesta or Cbus to name a few of the larger ones.
Now, I’m not saying that this default insurance structure is a bad thing. Many people simply wouldn’t be covered at all if it weren’t for their Industry super fund that has a bit of Life and TPD and possibly some very basic Income Protection included. And when something does go wrong they will get something to help them in a time of financial need.
However, most of these people wouldn’t be aware of how basic and possibly inadequate these policies are.
As a starting point, the average Life insurance amount is about half the average mortgage in this country.That is a massive gap just in itself.
Then most industry fund Income Protection policies (if you have one!) pay you for a maximum of only 2 years. That’s not very long and leaves you without income for a long time if you can no longer work again!
Seeing a fully licenced financial adviser to get a quality, personalised and appropriate insurance portfolio in place is not only easy and quick but nowhere near as expensive as you may think. Not if they want to maintain their current assets and lifestyle for yourself and your family.
For the sake of a couple hours consultation with a fully licensed insurance adviser, your financial future can be secured fully.
This can include:
- Getting the best quality policies available
- Transparency on what you pay and what you are getting
- Fully licenced and documented advice throughout your life
- Structuring how you pay your premium so it is affordable even when you get older
- Structuring cover to maximise tax deductibility
- Knowing that you will be paid on what you think you are covered for
Here is an opportunity for you to tick that important job off your list and make sure you aren’t one of these statistics who haven’t covered you and your family properly.
If you have an adviser that can advise on personal insurance, then contact them and make sure they have reviewed your policies...we need more people covered adequately.
Ashley Davidson from Eastside Insurance Advice in Vermont in Melbourne specialises in personal insurances. He can be contacted for an obligation free chat.
This information may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.
Article by:
Comments4
"Well done Ashley, I agree 100% with you. late last year I spoke to 2 clients who had friends who had bowel cancer. They were talking about 2 different people with exactly the same experience. They both went to their industry super funds and needed to claim. They'd seen "disability cover" on their statements and assumed they were covered. No fault of the industry super, what they had was Total and Permanent Disability cover, (no income protection). They were told they were not covered as they are likely to return to work which means they are not eligible. My clients was saying how they have been devastated financially and how much of an affect it's had on their recovery. Unfortunately people often don't look at what their cover really is until they need it. It's a rude shock when they then find out it's inadequate. Speaking to an adviser can make a massive difference and the best time to do it is when you are not expecting to claim. Your insurances need to protection when you need it most, it's not that hard to make sure that happens. Speak to an adviser."
Ben Day 09:24 on 04 Mar 19
"A few years ago a Life Company employee related a story to me. A woman and her 3 young children, all under ten years of age came to her office to collect a cheque. The woman's husband had passed away unexpectedly and the husband had some money through his employer super fund that was now being paid out to his wife. When the employee handed the cheque to the wife after expressing her sympathies, the spouse opened the envelope, looked at the amount of the cheque screwed it up, threw it back at the employee and said how do you expect my kids and I to live on this. The cheque was for about $108,000. The average wage now is $82,000 pa and although it would have been lower then it clearly wouldn't have replaced her late husband's income! In many cases like this the kids lose both parents as their Mum now has to go out to work to replace the husband's income and she may have been a full time stay at home Mum before her husband's death. So when I meet a couple who have dependant children and a principal income earner I always ask them about their safety net. Do they have one? I also kill off the one earning the most amount of income by saying if you died last night what plans have you put in place to replace the income you currently bring in. Due to the she'll be right attitude many families are forced onto Centrelink payments and also have to launch fundraising events. The Disability Support Pension only provides $24,000 pa a far cry from the $82,000 pa average wage. For every house lost to fire, 3 are lost to death and 48 to serious accident, illness and injury. The simple fact is the average mortgage payment can't be sustained on Centrelink payments and homes have to be sold if the principal income earner is no longer around or can't continue to do their normal job. Yet most people insure their home but not the person or people who bring in the money to pay the mortgage and home insurance. Good advice is all about being made aware of issues and then being given options to fix them such as putting in place a safety net for your family. "
Daryl La' Brooy 17:08 on 01 Mar 19
"Although some cover is generally better than none at all, the default trend of Australians to rely on whatever policy their Super Fund puts in place for them is alarming. There needs to be some real education on personal insurance needs, particularly regarding milestone events in peoples lives. Unfortunately, people are seemingly unwilling to pay a professional for their service, so the looming changes in commissions will further exacerbate the disconnect between insurance needs and actualities."
Shane K 17:00 on 01 Mar 19
"There is a real under appreciation for life insurance in this country - it will only get worse if commissions are removed. But the advice in this piece is sound, even if you have to pay upfront - GET INSURED. I've seen so many cases where people are underinsured and when things go "pear shaped" - as they do, they are put under real, continuous financial stress. Their health and relationship and indeed their entire life suffers as a result of not having the foresight to get their insurances in order "
Lucas F 16:20 on 01 Mar 19