Which professions are the least likely to have life insurance?

Published 22 Jan 2018

Life insurance policies are designed to give policyholders peace of mind that unforeseen circumstances won't place their family in financial difficulty.

These products can encompass a number of different areas, including cover for total and permanent disabilities (TPDs), critical illnesses, income protection and death.

Unfortunately, recent research from insurer NobleOak found some professionals who are most at risk of injury in their jobs are neglecting to take out sufficient coverage.

Tradies failing to insure themselves

Only 43 per cent of labourers and tradesmen have life insurance, according to the data, which was published by News Limited. This was notably lower than the 55 per cent national average and significantly below doctors and lawyers (68 per cent).

Office workers (60 per cent) and stay-at-home parents (55 per cent) were also more likely to purchase life insurance policies.

"It's surprising that life insurance or income protection insurance isn't part of a tradie's toolkit, especially when they are working with power tools and up ladders on a daily basis," said NobleOak CEO Anthony Brown.

The construction industry is responsible for a significant proportion of injuries and deaths in the country. Ten per cent of workers compensation claims and 12 per cent of employment-related fatalities occur in the sector, according to Safe Work Australia data.

Overall, construction employees are responsible for approximately 12,600 workers compensation claims every year for serious injuries or illnesses that require more than a week off work. Most workers hurt themselves due to body stressing (37 per cent), while the majority of deaths are falls from height (28 per cent).

Are higher premiums turning labourers away?

One reason tradies and labourers may avoid life insurance is because they must pay higher premiums. News Limited claimed workers often pay between 20 and 200 per cent more than other professionals.

But Wotherspoon Wealth Director Simon Wotherspoon said this trend merely highlights how important life insurance is to this demographic. The premiums are higher because construction workers are more likely to claim.

"People insure their tools and their cars, and when their biggest asset is their ability to earn an income, they should make sure they're covered," he added.

However, a previous NobleOak survey found that more than one-quarter of people who purchased life insurance weren't even aware of what their policies covered. Of these, 35.5 per cent admitted they had never read the necessary documents.

This could place policyholders in a precarious position when the time comes to claim, as they may not be aware of exclusions that could prevent a payout.

Contact Gerard Malouf & Partners Superannuation Lawyers for more information on how to challenge a rejected insurance claim.

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