Research from Australian life insurer TAL showed while 79% of Aussies rate life-related insurance as important or very important, only 52% of people said they actually hold some form of life insurance.
TAL indicated that retirees and those approaching retirement are at particular risk without financial protection and have the most to lose from setbacks such as an accident or illness.
TAL Group CEO Jim Minto said while it is encouraging that people recognise the vital role of life insurance, “the relatively low protection levels reflects just how much work is to be done educating the community about the need to protect themselves and their families.”
Minto explained that life insurance ensures that you can reach your ongoing financial commitment in the event that your income stops suddenly due to accident or illness and shouldn’t stop once the mortgage is paid.
“Having protection such as critical illness insurance, which can finance special treatments, pay everyday bills and for costly rehabilitation and modifications such as wheelchair access remains relevant long after the home is paid off.”
Minto said another major pitfall is people falling into the trap of thinking because they have one type of insurance that they no longer require any of the other types of cover, because they each serve specific purposes to meet different needs.