Why are Australians underinsured? What can be done to change this?

Australians can probably consider themselves fortunate. Compared to other nations, Australia’s social security, healthcare services, and living standards are quite competitive.

However, for some people, knowing this can also breed complacency, which in itself can be harmful.

The importance of insurance for Australian families

The ecosystem that supports the financial, emotional, and physical welfare of Australians includes life insurance as a key component. However, Australians frequently have insufficient insurance in this area.

The one good thing that ensures the majority of Australians have life cover is superannuation-based insurance. Super members are typically offered three types of coverage:

  • Death cover or life insurance
  • Total and permanent disablement (TPD)
  • Income protection

Still, while this insurance is helpful, it also has its limitations and covers only a basic level of needs. It’s also inadequate to cover the needs of parents with very young children — especially in cases of total and permanent disablement and death.

How to avoid underinsurance

Although the underinsurance problem plagues a lot of Australians, it comes with a solution.

You can easily protect yourself from it by:

  • Familiarising yourself with the risks you face, whether as a business or homeowner.
  • Getting accurate estimates of the value of your home and its contents. The same goes for business owners and their assets.
  • Regularly review your policies. Try to do this annually to check if you need to increase your cover.
  • Opting for insurance cover that fits your budget and protects you from risk exposures.

Reach out to the Sherlock Wealth team to review your insurance needs and ensure you have the cover you need. Book a chat here.

(Feedsy Exclusive) Source: Matrix Planning Solutions

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