Do you insure your biggest asset?

It’s a sad fact that most Australians are dangerously under-insured.  And It may just be high time you reviewed your levels of insurance protection!

Take the example of Matt.  He is a clean-living 53-year-old who exercises regularly, doesn’t smoke, enjoys a healthy diet and only indulges his love of good wine at the weekend.

Yet things changed suddenly for Matt last year when he awoke one night to find he couldn’t breathe. His wife called for an ambulance and he was rushed to hospital, where he was taken into life-saving surgery following a heart attack.

After waking from his operation, Matt was in shock. He knew there was a family history of heart disease, but had gone to great lengths to prevent the onset of the illness and had definitely not properly thought through how his family would cope without him.

During recovery, Matt reviewed the insurance component of his super and discovered that in the event of his death his family would receive just $300,000, which would barely pay off the mortgage. He hadn’t taken into account daily living expenses, car loans, and his daughters’ school fees, his wife’s low income or their inadequate savings.

Fortunately for Matt, his story is a positive one. Now in better health and back at work, he has spoken to a financial adviser and taken out additional life insurance, albeit at a significant premium following the heart attack. He and his adviser are looking into critical illness cover, which would pay out a lump sum should he suffer another sudden illness, although he’s likely to now have a coronary exclusion.

Unfortunately, in Australia, Matt’s story is not uncommon.  Surveys have shown Australia has much lower levels of insurance than other developed nations including the United States and United Kingdom [1]. The required level of life insurance is now about $680,000, while the typical default cover is around $258,000 – a significant gap [2].

Maybe it’s time to ask… could your family make ends meet if you were unable to work, suffered a serious illness or died? Here are some things you should consider:

  • Ongoing Mortgage or rent payments
  • Daily living expenses – food, bills, transport, utilities, insurances
  • Childcare, school and university fees, text books and accommodation
  • Other expenses – house repair costs, medical expenses, personal health & grooming, replacement of white and brown goods

Make an appointment with your financial adviser to discuss your insurance needs and ensure you are adequately covered, or call the team at Wealth Planning Partners to discuss your needs on 07 5593 0855.  They help clients Australia wide with their protection strategies.

 

[1] Lloyd’s Global Underinsurance Report 2016

[2] Rice Warner Underinsurance Research Report 2014

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