Helping Australians get the right coverage

Australians not having sufficient insurance coverage has been a well-documented problem for a while now. We’re one of the most underinsured nations in the developed world. While 83% of us have car insurance, only 31% have coverage to protect our incomes should we no longer be able to work. ¹

Why don’t we have suitable coverage?

There are a few reasons why we find ourselves in this predicament. The first is general apathy. A survey of 1,266 Australians conducted by TAL showed that the majority of respondents admitted they either didn’t have adequate financial protection (33%) or simply didn’t know (23%).²

There’s also still a misconception that life insurance is a one-size-fits-all solution. People believe that cover through super provides sufficient protection alone. While this may be true for a small percentage of the population, most people who retain the low, default cover will find that this isn’t enough once they assess their personal needs.

Helping solve the puzzle

For their part, super funds have tried to rectify the situation by recognising that:

• default levels were too low for too long
• single people generally don’t need as much life cover as families
• young people have a higher need for disability cover than death cover
• the amount of cover should fall for older people as they pay off their mortgages and have accumulated savings (the family home and super). ³

At TAL, we’re helping Australians to close the underinsurance gap and ensure they have the appropriate protection they need. Many of our group policies allow for simple (i.e. without full underwriting) ways for members to obtain cover in excess of their default cover. This is done through automatic increases at the commencement of cover or through short form underwriting as in the case of Life Events cover (increases in cover due to marriage, child birth etc.).

Despite the relatively uncomplicated manner of obtaining this extra cover, we’ve found there has been low take up of these options where it is available. Our team will be happy to work closely with your fund to better promote this benefit to your members so that they have the protection they need when they need it most.

How can we help you?

If you would like to find out more about how TAL can help your members get the right insurance coverage they need, start a conversation with your client manager today.

Sources:
¹Lifewise: Underinsurance, a problem in Australia?
²TAL: False reality about financial protection
³Rice Warner: Australia’s persistent life insurance gap