First Myth - Life insurance is too expensive
For most Australians insurance is very affordable. For less than the price of a cup of coffee a day, you can get a substantial amount of cover to protect your family's lifestyle. And, of course, the benefits of having life insurance can far outweigh the costs!
For just $1 a day you could get a substantial amount of Life Cover.
Assumptions: white collar, non smoker, stepped premium, paid annually.
Second Myth - I'm young and healthy - so insurance is not for me
Life insurance can help people of all ages, and from all walks of life - it's not just for parents with kids and a mortgage.
Even if you're young, single and healthy today, insurance is important to help you protect your lifestyle, your independence and cover your debts - in the event that you need to.
Insurance policies like Income Protection or Trauma Cover can help you cover the bills, pay your rent or mortgage, cover medical expenses and continue to fund your lifestyle if you can not work because you get sick or injured.
Third Myth - Thanks, but I've got enough life insurance cover in my super fund
You probably don't have enough cover in your super fund. You may have some life insurance (death cover) through your super policy, but on average people with cover through super have less than half the level of cover they need.1
Insurance through super also usually doesn't give you access to all insurance types - like Income Protection or Trauma Cover.1
You should contact your super fund, or check your annual statement, to see what level - and types - of cover you already have.
Fourth Myth - I'm covered by my private health insurance
Private health insurance provides valuable protection against the medical expenses associated with sickness and injury. But this is where it starts and stops: it's for medical expenses only. It won't cover your bills, debts or replace your lost income if you have to take an extended period off work due to illness or injury.
Private health insurance also may not cover the total cost of your treatment, or rehabilitation - potentially leaving you with a 'gap' that needs to be paid out of your own pocket.
To ensure you have no insurance gaps, a complete protection plan should encompass both private health insurance and life insurance.
Fifth Myth - The government will look after me if I get sick
The Government, through Centrelink, provides financial assistance for people who suffer a serious disability.
But the Disability Support Pension doesn't go far and there are rules around who is eligible for it.
From 20 September 2015 the Disability Support Pension for a single over age 21, or under 21 with children, is $794.80 per fortnight.2
At $20,664 per annum, that's around a quarter of the average full-time income of $62,270.3 This could leave you with a funding gap when it comes to covering the bills, your rent or mortgage, medical expenses and your lifestyle.
1 www.lifewise.org.au
2 Payment rates appear as a guide only and are effective from 20 September 2015 and include Pharmaceutical allowance - www.centrelink.gov.au
3 Average Weekly Earnings, Australia May 2009, ABS, Catalogue 6302.0 www.abs.gov.au