While most of us would never risk driving a car without motor insurance, only a third of us are insuring our most important asset, our ability to earn an income.
Our most important asset is our ability to earn an income.
Underinsurance refers to inadequate levels of insurance cover. While most of us have some form of insurance cover, it may not be enough to cover the cost of immediate necessities in the unfortunate, but likely event of a claim.
In recent times, compulsory default insurance requirements in superannuation have facilitated a considerable improvement in insurance adequacy. However, according to Rice Warner, of “those who have life cover, the median cover level is estimated to be approximately $143,500, which is only twice the median household income.” When you take into account the average cost of raising a child ($297,000), average home loan size ($371,700) and average credit card debt ($3,130), this is simply not enough.
So, why are we underinsured? Are we too relaxed or more money conscious than ever? Are we too wealthy or not wealthy enough for life insurance, or maybe it’s never crossed our mind? There are many reasons contributing to our underinsured population and unfortunately, the tricky thing about being underinsured is that you don’t know that you have a problem until it becomes a problem.
Contact us to conduct a review of your existing insurance and determine levels of adequacy with respect to your financial position.
This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances.