Is it your home, your super, or even your car? You may be surprised to learn that your most valuable asset is probably YOU!
For example: A 35 year old who receives an average salary of $50,000 each year over their working life would need a lump sum of approximately $1million to replace that income.
What will happen to you or your family if you’re no longer around, or can’t work? Can you replace your lost earnings? Will the mortgage be paid? It’s not a pleasant thought that your family would have to sell your home if they couldn’t make ends meet.
Unfortunately, while most of us will happily insure our car and home, we seem less than happy to insure that very valuable asset, ourselves. Just 55% of Australians have life insurance and 31% have income protection insurance.1
Even if you do have insurance, you may well be underinsured. Average group life cover falls about $165,000 short of the amount of the average new mortgage.2 It’s probably no surprise then, that studies3 have found that 60% of Australian families with dependent children will not be able to support the family on their insurance payout for more than one year.
You may feel uncomfortable thinking about insuring yourself and push the idea aside. After all, insurance gets paid when something unexpected and painful happens. But not thinking about life or income protection insurance may leave you and your family facing further painful financial consequences. Having sufficient insurance cover may help you avoid this.
How much cover do I need?
For Life Insurance, some experts4 recommend you’ll need cover of around 10 to 13 times your taxable earnings if you’re in your mid thirties with young children. If you’re in your mid forties with older children, you’ll need cover of around 6 to 9 times your taxable earnings. We can discuss this and Income Protection Insurance with you and make a recommendation about the level of cover that’s right for you!
Go to the contact page of our website to arrange a free no obligation quote today!
Source: Colonial First State – Educational Series
1TNS/IFSA, investigation Income Protection Insurance in Australia (07/06)
2IFSA Life Insurance Headland Statement (07/07)
3Underinsurance Key Facts, IFSA (08/05)
4RiceWalker Actuaries, for IFSA Cost of Underinsurance Project (05/05)