What’s worth more – your belongings or your livelihood?

At least one in five of us will be unable to work due to injury or illness in our lifetime, yet we're still more likely to insure our car than our most important asset–ourselves.

You might have the attitude ‘she’ll be right’ but looking at the statistics, there is more chance of something going wrong than you might think.

Over 80% of Australians insure their car but less than a third of us have income insurance should we have an accident and be unable to work1.

How invincible are we really?

It’s estimated that at least one in five Australians between the ages of 21 and 64 will be incapable of working at some point due to an unforeseen accident, injury or illness2.

Despite this, almost 95% of the population is underinsured, meaning we could be setting ourselves up for real financial difficulties should something happen3.

Here are some national figures to put it into perspective:

  • Every year 236,000 people of working age suffer a serious injury or illness4
  • 18 families in Australia lose a working parent every day of the week5
  • 50,000 Australians have heart attacks every year6
  • One third of women and a quarter of all men are diagnosed with cancer7
  • More than 1,600 people die on Australian roads every year, most aged 26 to 598
  • A stroke occurs every 12 minutes across the country9.

Debunking the myths

The national Lifewise campaign set the record straight on a number of misconceptions believed to be part of the reason behind why Australia is underinsured as a nation. These include:

  1. The government will look after me if something happens
    Centrelink pays benefits, but it might not be enough to cover your current lifestyle.
  2. Workers’ compensation will cover me
    This only covers incidents that occur during work hours or illnesses that are a direct result of your employment.
  3. Life insurance is not affordable
    For most Australians insurance is affordable and can be paid via monthly premiums. If you want a quick estimate, our online calculator can help you crunch the numbers.
  4. Life insurance companies don’t pay claims
    Insurers pay out almost $10 million every working day in claims.
  5. I’ve already got enough insurance
    Research shows 60% of families with dependent children don’t have enough insurance to cover household expenses for a year if the family bread winner were to pass away. 

What types of cover are available?

Insuring yourself and your income can allow you to maintain your lifestyle and living arrangements, and give you comfort in knowing you can still meet your financial commitments—things like mortgage, rent, card repayments, bills, kids’ education fees, and treatment and rehabilitation costs should you need it.

You can buy different forms of personal insurance through your super fund or via an insurance company, broker or adviser. Here’s a rundown of the four main types of cover available:

  • Life insurance pays a lump sum on your death or the diagnosis of a terminal illness
  • Trauma insurance pays a lump sum on the diagnosis or occurrence of a specific illness
  • Income protection provides a replacement income of up to 75% of your regular income if you’re unable to work due to illness or injury
  • Total and permanent disability (TPD) pays a lump sum if you become disabled and are unable to ever work again.

What AMP’s doing in this space?

In 2014 (2015 figures to be released in April), AMP paid more than $887.6 million in claims across its life, trauma, income protection and TPD policies. The age range of those making a claim varied from six years old to 88 years old. You can see more figures in our claims paid brochure.

The important thing to understand is why insurance might be necessary for your situation, whether that includes a partner or children, and how much you need so you are not under or over insured.

For further information

1 www.lifewise.org.au/facts-research#sthash.fSaAIgeC.dpuf
2 www.lifeinsurancefinder.com.au/post/compare-life-insurance-australia/the-impacts-of-underinsurance-in-australia/
3 www.lifeinsurancefinder.com.au/post/compare-life-insurance-australia/the-impacts-of-underinsurance-in-australia/
4 www.lifeinsurancefinder.com.au/post/compare-life-insurance-australia/the-impacts-of-underinsurance-in-australia/
5 www.lifeinsurancefinder.com.au/post/compare-life-insurance-australia/the-impacts-of-underinsurance-in-australia/
6 www.lifewise.org.au/insurance-101/understanding-the-risks
7 www.lifewise.org.au/insurance-101/understanding-the-risks
8 www.lifewise.org.au/insurance-101/understanding-the-risks
9 www.lifewise.org.au/insurance-101/understanding-the-risks

How much insurance do
you need?

There are many factors that can affect the level of cover you need. Our calculator can help you work out how much cover you may need.

Find out now

Protecting your future

Learn more about the concept of risk and why insurance is important.

Learn more


Want to keep up to date with the latest news?

Subscribe now

Want to keep up to date with the latest news?

Sign up now

Recommended articles

Important information

Show more

© AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.