Australians are experiencing an increase in financial burdens thanks to a significant trend of under insuring.
Countless Australians do not have the financial capacity or existing funding to accommodate a long-term illness or potentially leave work for an extended period of time.
Financial Advisor Carla Benson said that inadequate insurance cover was a significant problem in Australia.
“It’s disturbing to think that many people are putting themselves at significant financial risk by not having an adequate level of insurance,” said Ms Benson.
For the largest part of the population, income is not something that can be jeopardised so it is important that people protect themselves by ensuring they have sufficient insurance cover.
Ms Benson believes many households retain policies to protect tangible assets, yet do not protect their main source of income or sufficiently prepare for the risk of experiencing a traumatic event.
“Trauma insurance is often overlooked as a priority because of the common misconception that savings, employment, government and health benefits provide a sufficient safety net," said Ms Benson.
The financial burden of medical costs and obligations is increasing, as are the chances of experiencing or recovering from a traumatic event.
Ms Benson claimed that Australians tend to believe that “It won’t happen to me”, however everyone knows someone who’s experienced a serious illness or accident, and it can happen at any age.
Statistics from Aviva indicate that 70% of the critical illness benefit payments made to their policy holders during the period of 1990 – 2008 were to sufferers of malignant cancer, followed by heart attacks.
“The harsh reality is that if these patients didn’t have trauma cover, they may have not been able to afford to pay for the upfront medical treatment required to save their lives," Ms Benson said.
“Everyone should reassess their financial circumstances and weigh up the risks," she said.
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