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10 reasons to insure

Ten things you need to know about protecting you and your family

1. Even if you’re healthy, it’s good to have insurance

When you are in good health is generally the best time to take out insurance. As you get older, you may begin to suffer health issues which could make you ineligible for cover or incur higher premiums.

2. Yes, it could happen to you…

The chances of you falling seriously ill are higher than you probably think. Past research has shown:

3. People under 40 get sick too

We often think heart attacks, strokes and cancer happen to older people. The reality is that illness can happen to people of any age. Here are some real CommInsure claims:

4. The average Australian home loan debt level is high

The last decade has seen Australian median house prices almost double while median after-tax incomes only increased by 50%. This means bigger mortgages that take longer to pay off. Not being able to meet major financial commitments could result in you having to sell your home, possibly move suburbs, change schools or worse.

5. Insurance is important even if you don’t have debts or dependents

The house may be paid off or the kids grown up, or you might not be at that stage yet. However, if tragedy strikes, you’ll still need an income to pay for extra household assistance, medical expenses and to help ensure you maintain your current standard of living.

6. Insuring yourself may cost less than you think

A daily cup of coffee from a cafe can cost up to $90 a month. You most likely insure your car, and your home and contents, so shouldn’t you insure yourself? Compare the costs of these expenses with the cost of life insurance in the table below. It may be better value than you think!

If you’re finding it difficult to pay for your insurance, contact your financial adviser to discuss ways to make your premiums more affordable.

7. Insurance through your superannuation fund may
not be enough

For a family with young children and average earnings of $50,000 per year, insurance needs are estimated at $500,000 to $650,000. Yet, the average insured amount in superannuation funds is just $70,000. How much insurance do you have in your super fund? Use a policy outside of super to close any under-insurance gaps.

Some things to consider about the insurance in your super fund:

• Is the insurance benefit in your fund: insurance only, or is it a combined total with your super as well? (therefore the insurance component is smaller than you realise)
• Can your insurance be continued if you were to change employers?
• Is your sum insured amount reducing as you get older?
• Is the waiting and benefit period on your income protection adequate? Income protection in super may only last two years. Consider a separate income protection policy with a longer benefit period.

8. Eligibility to lodge a workers’ compensation claim is actually quite restricted

• Workers’ compensation is not available to self‑employed people.
• More than 50% of all serious accidents happen away from work where workers’ compensation does not apply.
• Workers’ compensation does not cover non-work related illness.

9. You shouldn’t just rely on government benefits to maintain your lifestyle

Government social security payments offer only a modest level of income support. If you had to rely on a Disability Support Pension, you and your family may not be able to maintain a resonable lifestyle.

10. Private health insurance may not pay your day-to-day expenses

Private health cover does form a part of your insurance plan, paying for hospital stays and some medical/extras expenses. But, it doesn’t necessarily cover things such as your out-of-pocket medical expenses or rehabilitation costs. Most importantly, private health insurance doesn’t cover home and car loan repayments and other costs of living.


1 General Cologne Life Re Australia, 2002.
2 National Heart Foundation Statistics, Australian Facts 2001 Highlights.
3 AMP.NATSEM Issue 29 – Income and Wealth Report, July 2011
4 Assumes $3 cup of coffee per day for 30 days.
5 Life Care and Income Care insurance assume a 35-year-old male (age 36 next
birthday), living in NSW, non-smoker, degree-qualified accountant, annual income
$150,000 stepped premiums; Life cover of $500,000, $10,500 monthly Income
Protection benefit (includes $1,125 super continuance), indemnity, 3 month waiting
period, benefit period to age 65. Monthly premiums don’t include $6.30 policy fee
and are quoted as at 19 January 2012. The CommInsure car insurance premium is for a 35 year old male (age 36 ANB),
living in Manly NSW (2095). He drives a 2006 Toyota Corolla automatic, with
comprehensive car insurance at market value, 70% no claims discount and a $700
excess. He has held his licence for 15 years and his car is garaged and there is no
finance on the vehicle. Monthly premiums include the policy fee, government taxes
and charges and are quoted as at 24 January 2012.
6 Based on CommInsure average claims in calendar year 2010.
7 IFSA – Rice Walker Fast Facts: A Nation Exposed! Underinsurance Key Facts,
August 2005.
8 Australian Bureau of Statistics National Health Survey – Summary of Results,
Australia- 4364.0, 2004-2005.
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