Underinsurance In Australia

Alarmingly, only 4% of the Australian households which have dependent children have adequate levels of life insurance.

This statistic was reinforced with the devastating Black Saturday bushfires in Victoria in February 2009. 173 people lost their lives and hundreds of others were left injured yet figures from IFSA show, that following on from this tragedy, there have been only 30 Term Life Insurance claims for those who perished and 10 Income Protection claims for those injured!

Insurance

All super funds are required to take out minimum life insurance cover of $200,000 Life and TPD, however we strongly recommend that a full insurance analysis be undertaken by providing us with some personal details so that we can ascertain an appropriate level of cover.

Income protection and total & permanent disability quotes can be arranged on request.

Please look at the following calculator to help you determine an appropriate level of personal insurance cover.

MLC Insurance Gap Calculator

In the video below, an MLC customer shares her story of facing, and overcoming, serious illness and how insurance helped her.

MLC - Elizabeth's Story

Life Cover

No one likes to think about death but the reality is that unexpected events can and do happen. That's why life insurance is so important. Life insurance provides a tax-free lump sum to a nominated beneficiary (dependant) in the event of terminal illness or death.

While no amount of money could ever compensate your family adequately for your loss, the right amount of money could remove the burden of financial stress and cover the loss of income created by your death. This money could be used for a number of purposes; to pay off a mortgage or retire other debts, to fund your children's education or to create an investment income stream.

To determine how much cover is the right amount of cover for you, you need to calculate the amount of money that your family would need in your absence. Once an application for life insurance cover is approved, you pay a regular premium to keep it in force which is deducted from you superannuation plan, so there is no additional burden to your disposable income.

Over time, as your circumstances change, so to should your life insurance cover. Your cover needs to be flexible enough to meet every circumstance. You might want to increase your life cover amount to reflect added responsibilities such as increased debt commitments. Conversely, you may want to decrease your life cover as your financial commitments reduce. You may also want to consider a policy that allows the benefit to be increased each year automatically in line with inflation.

Total and Permanent Disablement Cover (TPD)

Total and Permanent Disablement cover is an optional extra cover that you can add to your life policy.

It provides a benefit - usually a lump sum - if you suffer a permanent disability that prevents you from working.

Total and permanent disability insurance payments are generally not made until the disability has been evident for at least six months and the insurer deems that you are unlikely to work again.

This type of insurance might suit you if you do not have a significant amount of extra money that could be used if a permanent disability prevents you from working.

Income Protection or Disability Insurance

Income Protection cover may provide you with an income stream should accident, injury or sicknesses prevent you from earning an income from your regular occupation.

With income protection insurance you can insure up to 75% of your monthly income. This would enable you to cover your greatest asset, your ability to earn an income.

There are two key decisions you need to make with this type of insurance - you need to choose a waiting period and the benefit period. The waiting period is the amount of time following an injury that you must wait before you make a claim.

Generally the longer the waiting period, the lower the premium is on your policy. The benefit period is the length of time that you require the income replacement. Obviously, the longer the benefit period, the higher the premium is on your policy. 

You may need to ease back into work or even change career after suffering an accident, injury or sickness, so you should ensure the policy recommended to you is flexible enough to continue to assist you with reduced payments if this occurs.

Critical Illness or Trauma Cover

Critical Illness or Trauma cover is another optional extra cover that pays a benefit as a lump sum if you are diagnosed with one of a range of specified critical illnesses. These may include heart attack, cancer, stroke or loss of independent existence.