The Reality of Insurance; It's There When You Can't Be

by Dominique Schuh

How long could you last financially if you lost your job, or worse, couldn't work at all?

Research from Zurich says nearly 60% of us would be looking behind the couch within three months, while a recent survey by an insurance comparison website found it was closer to half of Australians. Of course, this data comes from fairly minimal surveys sizes, but these often consistent findings do point to the high levels of risk many Australians carry.

Our elevated house prices are underpinned by high debt levels – our housing debt to disposable income is still near an all-time high, around 140%. Go back nearly 20 years ago, to 1999 and it was 76%. These kinds of debt increases are further partnered with other ongoing commitments that quickly drain the weekly income.

Forget your house or car, generating the income to pay for them along with the food on your table (and all the other bills) is your most important asset. The two most obvious options to protect yourself are a consistent savings plan and insurance.

However, saving won't be anything more than a short-term bridge because it would often be impossible to save what insurance could cover in the event of illness or injury. When it comes to considering insurance the worst thing to think is "it can't happen to me". Walk into any hospital and you'll find people in shock that a permanent injury or serious illness has struck them down.

In Australia, while cancer and cardiovascular disease deaths are down, more people are living with their after-effects, which inevitably impact their employment and income. For a 40-year-old male, there's a 28% chance they'll suffer a disability or medical trauma by 65, while for a 40-year-old female there's a 23% chance.

No one knows if (or when) they may suffer a serious health issue, but everyone can plan in the event of it. It might remove that concern about what happens after three months without an income. If you would like an obligation free review of your current insurance program, or if you'd like to talk more about how life or disability insurance would apply to you, please contact the team at Schuh Group.