There is a good chance that your largest, most valuable asset is underinsured. It is not your car, it is not your home, it is your ability to generate an income. Income protection insurance can replace up to 75% of your income through your inability to work due to injury or illness. Knowing what cover is appropriate for yourself is an important step in safeguarding your financial life goals. If there are people dependant on you to provide an income, we recommend a review of your existing insurance cover.
Many Australians may not be concerned with insuring their largest financial asset, as it does not immediately impact them. A 2015 report completed by Rice Warner ‘Underinsurance in Australia’ states that, existing levels of Income Protection Insurance for Australians only meets 16% of their needs.
It is possible that you have some default cover within your Superannuation account.
This can be checked by calling you Superannuation provider or reading your Annual Superannuation Statement.
However, this level of cover may only provide you with Income Replacement for a period of two years. There is a possibility that you might not be able to return to work after a period of two years.
- What then?
- Can you still achieve your personal financial goals with no income?
- What happens if you cannot work because of injury or illness?
- Where will you get an income to meet your daily living expenses?
These are important questions you should ask yourself if others rely on you to provide for them. The best time to act is now.
By taking the time to talk to a Financial Advisor or completing an online insurance calculator you can determine what cover amounts and period is sustainable for your needs.
Do not put others in a worse off position because you did not take the time out to check what level of cover is appropriate for you.