Are you one of the majority?
Paul Davies | December 04, 2017
Did you know that more than 70% of Australian life insurance is held in super funds?
But did you also know that almost 3/4 of those benefits wouldn't provide enough for the family after death or disability. So what's the point? Better something than nothing maybe?
These facts are according to financial services researcher Rice Warner.
Most people holding these policies are underinsured with median levels of cover only providing around 60% of the basic needs of an average household according to research compiled by Rice Warner.
But how much do you need?
There is a very simple exercise that can help you determine the level of life insurance you should need (or at least start to consider).
The D.I.M.E theory works out a starting point around finding out what is 'enough' for your family.
The research also found that while 73% of life insurance policies – (more than 13.5 million policies) – were held through some form of superannuation fund, underinsurance remained high for life, total and permanent disability (TPD) and income protection cover.
Rice Warner found that while median levels of life cover would cover just under two thirds of basic needs for average households, this dropped lower for families with children.
Rice Warner found that while median levels of life cover would cover just under two thirds of basic needs for average households, this dropped lower for families with children.
This median level of cover would also provide only 38% of the amount needed to allow family members and dependants to maintain their standard of living after the death of a parent or partner. The level of cover fell under 20% for TPD and income-protection with median cover meeting only 13% of TPD needs and 17% of income-protection needs.
Do you have enough? Find out HERE
