We all hate paying for insurance cover, regardless of whether it is car, home, health, life or any other of the many aspects of our lives we feel the need to protect. Everyone would rather put the money paid in premiums towards nicer holidays or other luxuries. However, when the car is in an accident we are greatly relieved that the insurer will cover the repair cost. Paying to cover the ‘what ifs’ is considered by most of us to be a necessary evil, for some of us it is ‘a good idea but I can’t afford it’ and for others it simply ‘won’t happen to me’. It can also be a conversation too confronting to have, discussing the potential of injury or death, so it just gets ignored. Let’s consider some of the above points:
– It won’t happen to me! One third of women and one quarter of men will suffer from cancer and one third of deaths in Australia are from heart disease. Someone in Australia suffers a stroke approximately once every ten minutes and over 60% of Australians will be disabled for more than one month during their working lives.
– I can’t bear to discuss it! 20% of Australian families will have a parent die unexpectedly, or suffer severe accident or illness. It needs to be discussed, because it may happen.
– I can’t afford it! Only 5% of Australians are considered to have ‘adequate cover’. While this is clearly a subjective statistic, the question must be, can you afford no to? What if something does happen? Can you make ends meet if it does? Some level of cover is better than none. Have you considered what your super fund offers?
For those that have accepted the need for insurance, the big dilemma then is ‘what do I need, how much cover is suitable and what is the right product for me? Not long ago we had millions of dollars of damage done by floodwaters and unfortunately the homeowners only found out when it was too late that their policy was inappropriate. That is not a discovery anyone wants to make, especially on top of the stress caused by the original event.
How many of us actually understand what cover we have and why? Do you know what TPD means, the difference between stepped and level cover, whether to hold life insurance inside or outside super, what trauma cover is, whether you are under or over insured? There are many confusing options and terminology and many of us have taken the advice of our broker blindly without asking too many questions. This does not make a lot of sense considering the stakes involved.
Two important questions:
– If the unthinkable happens, what am I actually covered for and will it suit my circumstances?
– If I agree to allocate a significant portion of my disposable income towards insurance cover, am I getting the best value for money possible?
If you do not have accurate answers to those questions, you need to get good advice from someone you can trust, someone who will consider your needs above what commission they can receive.