Bright side of protecting your family

Australians urged to look on the bright side of life (insurance)

Australians urged to look on the bright side of life (insurance)

A study conducted in the USA found that amongst 142 countries Australians rank in the top 20% for optimism. The academics behind this study suggested that optimism is linked to quality of life and factors such as education, income and, believe it or not genetics. Unfortunately this happy go lucky eternally optimistic outlook is at odds with the actual facts and figures around the incidence of illness and accidents in our country.

The stark reality is that the likelihood of experiencing debilitating illness is considerably higher than people might expect. The latest statistics from the Australian Bureau of Statistics paints a bleak picture with long term health conditions such as arthritis, mental illness and heart disease affecting more than seven million people. The Australian Institute of Health and Welfare has also estimated that as many as three in four Aussies are diagnosed with a serious illness in their working lives.

The statistics relating to accidents suggest that optimistic Aussies are also grossly underestimating their chances of suffering an accident that might prevent them from working. A report issued by the Australian Institute of Health and Welfare revealed that over a two year period alone, an estimated 50,000 people were injured in road accidents. Of these 36% were car occupants, 28% were motorcyclists, 18% were pedal cyclists and 8% were pedestrians.

So who foots the bill if someone is unlucky enough to get sick or injured and need an extended period of time off work? Your employer may cover this under paid medical leave but the legal requirement is capped at only 10 days. For those suffering long term disabilities, the current disability support pension amount stands at a maximum of $766.60 per fortnight for a single person or $585.50 for a member of a couple. The question is whether this amount will be sufficient to cover all the fixed expenses such as rent or mortgage payments and the high cost of living in Australia.

There are a number of life insurance products on the market that fill the void between short term paid medical leave and the limited Government assistance, helping people to meet their financial obligations should they find themselves off work for an extended period of time.

Critical illness insurance, also known as trauma insurance, will pay out a lump sum benefit in the event that you are diagnosed with a specified medical condition such as cancer, heart attack or stroke.

An income protection policy will provide a monthly benefit of up to 75% of a person’s salary in the event they suffer an illness or injury leaving them unable to work. Payments will be made for the duration set out in the policy.

Total and permanent disability insurance, otherwise known as TPD, pays out a lump sum benefit when you have been advised by a medical specialist that you will never work again due to ongoing illness or injury.

So whilst Australia continues to rank as one of the top nations for optimism, the possibilities of sustaining an injury or illness that would leave you unable to work are very real.

The reasons for insuring yourself and protecting your family and loved ones from the effects of illness or injury are compelling. For those who don’t take out insurance and fall ill or suffer an extensive injury the options are limited to the good will and generosity of family members, the assistance of the Government or dipping into any spare savings that may have accumulated.