‘It won’t happen to me’ keeps life insurance in the dark Down Under
by Efin Advisor | July 16, 2007
A study in Australia points out that “wealth protection” has improved in that country thanks to record levels of personal debt and prosperity.
Consumers insure assets to protect themselves from losing them. Buying a house goes hand-in-hand with home and contents insurance. Buying a car automatically makes you think of car insurance. After all, why work hard to buy things and then risk losing them, with no way to replace them?
But, when it comes to personal insurance, many are underinsured. The 2006 Mercer Financial Literacy and Retirement Study of 802 working Australians found 63 per cent of people who had a mortgage did not hold income protection insurance.
More than half of all respondents appeared confused about whether they had life insurance or not. The Aussies are asking thesemlves whether personal insurance is necessary? What if your job isn’t dangerous, you consider yourself fit and healthy? Well, it’s not so much the office paper cuts they need to worry about.
Consider these statistics:
Heart, stroke and vascular diseases kill 50,294 Australians annually (37.6 per cent of all deaths). Cancer affects one in three, and kills more than 36,000 people annually. And disability? One in three of us will have up to three months off work during our lifetime due to disability. One in two over 30 years of age will suffer asthma, cancer, heart disease, diabetes, injury, mental health or muscular/skeletal conditions.
Without good health, individuals may not be able to earn an income, meet repayments or provide for loved ones. It may also be a struggle to keep growing personal assets, for example contributing to managed funds, shares, or investment property.
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