Personal insurance: Why it’s so important to be insured

We can’t live forever, but we can prepare for the inevitable and make sure our loved ones are financially protected after we’ve gone.

Yet many Australian families are under-insured, with only 4 per cent of Australians with dependent children (under 18) holding adequate life insurance.

As financial advisers, we see so many statistics about the realities of life and death and the risks faced by Australians, including:

• 57,000 Australians have a heart attack every year (that’s one person every nine minutes)

• More than 430,000 Australians will have had a heart attack at some time in their life
• In 2020, about 150,000 Australians are expected to be diagnosed with cancer
• More than 1,180 people died on Australian roads last year, most aged 26 – 59 years
• Every 12 minutes, an Australian will suffer a stroke.

What do these statistics tell us? Is it that we think we’re bulletproof, or do Australians believe that personal insurance is only ‘sold’ or ‘promoted’ by individuals chasing a commission?

As advisers, we need to ensure our clients are educated about the personal risks they face and the circumstances they would find themselves in if something were to happen to them.

For many people, their ability to earn an income is their biggest asset, yet most insure their cars, houses and even furniture before their income.

If you owned a money-printing machine, you would protect it, wouldn’t you? Well that’s the problem we see with so few people having insurance to protect their income.

If you’re like most Australian families, your income is your biggest asset, it’s what keeps your family’s world turning, and it is what you rely on to achieve your financial goals.

Insurance is a key component of any financial plan, and there are different types of insurance that are suitable for different life stages. Without it, you’d find it impossible to pay the mortgage, school fees and day-to-day bills, let alone save for your future and retirement.

When you’re young and healthy, it seems impossible to believe you could be incapacitated by serious injury or illness — but as the statistics show, it’s more common than you might believe.

That’s why it’s essential to consider and prepare for these worst-case scenarios by taking out the right level of personal insurance.

Ensuring our clients are aware of the risks is not only our duty, but rather our responsibility as advisers. Insurance is merely the vehicle with which we help protect our clients from the risks we experience in life.

If you need help arranging the best cover for you and your family, give us a call on (03) 9875 2900 or fill in the contact form below.