Busting common myths about life insurance.
1. I'm too young for insurance!
You may not have a family or a mortgage to look after yet – but you still need to look after yourself. If you were to lose your regular income, how will you manage financially? You might not be able to afford your current lifestyle or manage debts like student loans or car repayments without a regular income. It could even mean moving back in with the folks.
If sickness or injuries mean you can't work, income protection insurance can help with regular payments – helping you keep up with your rent, mortgage or everyday living costs. Having protection plans in place can help increase your sense of Financial Wellbeing, knowing that if something were to happen you have a backup plan in place.
2. Life insurance is too expensive - and it's difficult to apply.
Life insurance can be surprisingly affordable – with cover from around a few dollars a day, depending on your age and the type and level of cover you choose. Depending on the provider, you can choose from a range of cover starting at a $50,000 lump sum payment up to $1.5 million. By choosing a smaller benefit amount, you can pay less in premiums.
And the good news is, life insurance can also be easy to get. You can even do it yourself online or by phone and get a personalised quote in minutes. In some cases you won't even need medicals or blood tests to apply. Life insurance is a small price to pay to help secure your financial future, and take care of the people who depend on you.
3. I've got insurance through my super.
You may have some insurance through your super, but often it can be less than you really need – particularly if you have a mortgage or a family. The amount of cover in super fund is a 'one size fits all' approach – it doesn't take into consideration your financial needs and how much cover you would actually need. And while you may be covered if you pass away, you may not have income protection to cover a short-term setback.
That's why it can be a good idea to review your current levels of cover in your super, check that amount against your financial commitments like your mortgage, school fees for the kids and other debts and note the difference. Add these responsibilities up as a starting point for how much cover you may need here. Then consider topping up your insurance outside of super – so you won't be caught short if you need to claim.
4. Between worker's comp and sick leave, I should be covered.
Worker's compensation can pay you a benefit only if you're hurt while you're working – but what would happen if you were injured over the weekend, after work, or when you're on leave? Worker's compensation won't cover you in these instances.
Australians are generally entitled to two weeks of sick leave per year, but if you suffer a major injury or illness you can be out of work for longer than a fortnight. After your sick leave runs out, you could be left without an income, making it hard to cover your expenses and debts. But, in most cases, life and income insurance will cover you 24 hours a day – both at work and at play.
5. If something happens to me, the government will look after us.
Government benefits can pay far less then you expect, making it difficult to maintain your lifestyle, pay your mortgage and look after your family. For example, in 2023, the disability pension was a maximum of $971.50 a fortnight for a single person aged 21 or over (with or without children)disclaimer – could you afford to live on this? With life and income insurance, you can set the amount you receive, helping ensure you'll have enough to get by.
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