Research showing that the majority of Australians are under-insured has prompted many insurance companies to advertise simple insurance solutions on television. Are these quick and easy plans suitable for your family?
A study undertaken by the Investment and Financial Services Association (IFSA) found that only 4% of the population with dependent children was adequately insured. Surprisingly, Australia is one of the most underinsured countries in the world.
The cause may be attributed to peoples’ uncertainties surrounding medical examinations, probing application forms, costly plans and persistent sales people. It is also not helped by the mistaken belief of many people that government institutions like Medicare or disability benefits will adequately support them in the event of a disability, injury or trauma.
Companies advertising on television attempt to eliminate some of these fears and often advertise products where:
- cover will generally be accepted without a medical examination,
- policies are easily arranged on-line or via a single telephone call, and
- premiums seem competitive.
For many people, these plans offer a practical insurance solution; older people, perhaps, without dependents who no longer have large financial commitments.
But if you have dependent children, a mortgage and other monetary obligations, and you wish to plan ahead for your family’s financial future, a do-it-yourself product would rarely suit you needs.
Consider the following questions:
- Is my existing life, TPD and income insurance adequate to cover my debt position?
- Would the family home need to be sold if our household income was reduced?
- Are you aware that you can structure your insurance premiums to be funded from Superannuation?
- Did you know that income protection insurance is 100% tax deductible?
- Which insurance company has the best definitions that suit my situation?
- Have I locked in a level premium structure to ensure my insurance remain affordable in the future>
- How can I restructure my insurances to save significantly on the premium and maximise my coverage?
- How will I go in the event of a claim in getting my full entitlement from the insurance company?
If these issues concern you it’s likely that you need a more tailored insurance plan.
Discussing your circumstances with your financial adviser will ensure that your particular needs and goals are addressed. And as your situation changes, for example, a new child, your adviser will review your insurance plan and update it as necessary. The biggest value from an Adviser comes at claim time when they will handle the claim on your behalf, negotiating with the Insurance company to ensure you get your maximum benefit paid out as quickly as possible.
Most people recognise the importance of car or home insurance, but neglect to consider their lives or their ability to earn an income. Given this, off-the-shelf insurance products fulfil their purpose as it can be said that encouraging people to take out some insurance is better than having no insurance.
But if an insurance plan specific to your family’s future security is important to you, it will take more than a phone call to arrange, while the peace of mind it brings will last a lot longer. Please contact us for further information.