New
research has revealed the extent to which Australians have misperceptions about
their life insurance and are consequentially setting themselves up for
disaster.
Zurich today released research that has exposed a ‘misinsurance’ gap in the Australian market and shows that many do not understand what they are and are not covered for through their superannuation-based life insurance.
Called Misinformed, Misinsured? the research polled 394 employed Australians in order to pinpoint what they believe they are covered for through their life insurance, and how this aligns with their own stated risk priorities.
the results are concerning.
“We’ve seen a massive explosion in self-service insurance, and similarly we’re seeing a lot of people that have insurance automatically given to them through superannuation,”
Zurich today released research that has exposed a ‘misinsurance’ gap in the Australian market and shows that many do not understand what they are and are not covered for through their superannuation-based life insurance.
Called Misinformed, Misinsured? the research polled 394 employed Australians in order to pinpoint what they believe they are covered for through their life insurance, and how this aligns with their own stated risk priorities.
the results are concerning.
“We’ve seen a massive explosion in self-service insurance, and similarly we’re seeing a lot of people that have insurance automatically given to them through superannuation,”
“One of the conclusions is that this is lulling
people into a sense of false security. There’s an opportunity for providers at every
point to provide education to consumers.”
Almost 80% of those surveyed said they had never conducted a needs analysis of their own life insurance; and big misperceptions included assuming a super fund life policy covered trauma, which it legally can’t, and a complete lack of knowledge about the salary continuance cover offered by a superannuation fund.
“Super funds give a degree of cover that is not tailored to your circumstances, it’s more of a formula,”
Almost 80% of those surveyed said they had never conducted a needs analysis of their own life insurance; and big misperceptions included assuming a super fund life policy covered trauma, which it legally can’t, and a complete lack of knowledge about the salary continuance cover offered by a superannuation fund.
“Super funds give a degree of cover that is not tailored to your circumstances, it’s more of a formula,”
“People assume that the amount they’ve got
is the right amount for them, but generally it isn’t because it’s not based on
their personal circumstances.”
One important finding to come out of the research was misperceptions about salary continuance cover due to personal illness or injury, which was particularly worrying considering participants’ levels of savings.
Generally income protection will kick in after a three month wait, however a majority of respondents (38%) said they would survive financially for just one month if they were forced to stop work after injury or illness, before needing to start selling assets.
“A significant proportion of people assumed it was a two week wait or less – so they’ve badly underestimated it,”
a number of participants believed that their super fund insurance covered things like visits to the optometrist and the dentist.
One important finding to come out of the research was misperceptions about salary continuance cover due to personal illness or injury, which was particularly worrying considering participants’ levels of savings.
Generally income protection will kick in after a three month wait, however a majority of respondents (38%) said they would survive financially for just one month if they were forced to stop work after injury or illness, before needing to start selling assets.
“A significant proportion of people assumed it was a two week wait or less – so they’ve badly underestimated it,”
a number of participants believed that their super fund insurance covered things like visits to the optometrist and the dentist.
“We’ve got people thinking they can go and get their teeth fixed.”
Advisers are faced with a huge opportunity to educate and help Australian’s to cover themselves correctly.
“There’s no doubt that from an adviser’s perspective this demonstrates that the need for quality advice has never been greater.
We could also send you several insurance companies claims paid out for the last year to prove to you that they do pay out so as you can maintain your lifestyle.
Recall 'if we were in your position what would we do so that you are better off in three years time.'
You can call us now on 07 3848 1088 or email us or visit our websites.
John McAuliffe
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