Zurich’s recent white paper ‘Misinformed, Misinsured?’ has certainly created a stir in the industry by shedding light on the lack of knowledge and understanding Australians have when it comes to their life insurance. The research also reinforces the critical role of quality advice and education to drive awareness and engagement of Australians, thus addressing this ‘misinsurance’ gap.
Whilst the concept of underinsurance – where consumers have the right cover but insufficient amounts – is well documented, the concept of misinsurance – where people actually have the wrong type of cover – has received less coverage despite being just as problematic.
Let’s take a look at some of the more astounding findings that came from surveying nearly 400 employed Australians:
– A majority (38%) of poll respondents said they would survive financially, for just one month before needing to sell assets if personal illness or injury prevented them from working and earning an income.
– Of those who are covered by their superannuation group life policy, a number wrongly believed they were covered for traumatic illness (11%), hospital expenses (7%), retrenchment (6%) and even dental and optical costs (5%).
– A lack of awareness of Income Protection insurance (sum insured and waiting period) also revealed significant misunderstanding amongst the polled group. Less than a quarter were aware of the amount they were covered for and just 15% correctly identified the waiting period (the time lapse between a claim being made and payments beginning).
– Almost 80% of those surveyed said they had never conducted an analysis of their own life insurance needs.
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