Published 10 Apr 2018
The person who said the best things in life are free probably didn't raise a family in Australia.
In 2007, a typical middle-income household spent $537,000 raising two children to adulthood, according to an AMP.NATSEM report. By 2012, this figure had shot up to $812,000 - and is likely to be even more now.
With such a huge financial responsibility falling on parents' shoulders, it's no surprise that a Real Insurance survey found one-quarter of mums and dads spend at least an hour every day worrying about their family's future.
Life insurance is designed to alleviate some of these concerns by providing a financial safety net should the worst happen. But how many families are adequately insured in the country?
Australia's underinsurance problem
The Real Insurance research revealed nearly 38 per cent of families don't have any life cover, with a further 6.5 per cent not sure. Only one-third of parents were confident they are sufficiently covered for unforeseen circumstances.
But Australians may also be overconfident in their policies. Independent think tank Rice Warner said the median level of life cover is only enough to meet 61 per cent of basic needs.
This is defined as the amount required to pay all non-mortgage debt, as well as maintain current living standards until retirement or your children turn 21. In fact, the research estimated a typical 30-year-old couple with two kids would need $1 million worth of cover to replace the income of losing a loved one.
Ultimately, more Australians insure their car (83 per cent) than their income (31 per cent), figures from Lifewise show.
Do you have life insurance cover without knowing it?
While it appears many Australians are underinsured, families may be unaware that life insurance is usually available through their superannuation funds.
More than half of respondents to the Real Insurance poll said their super is their primary source of life insurance, which includes total and permanent disability cover, income protection and critical illness policies.
This life insurance could provide crucial financial assistance if you or a loved one are ever seriously injured or become terminally ill. Furthermore, many Australians may have multiple valid policies with different super funds if they have moved jobs over the years.
Contact Gerard Malouf & Partners Superannuation Lawyers today to find out whether or not you can make a claim against your life insurance in order to help you and your family make it through difficult times.