Many Australians are misguided and misinformed about their Insurance needs. Often this comes from the belief that the base level of insurance that comes with many Superannaution Funds is enough. Some also think that these “within Super” insurance policies are as comprehensive as stand alone Life Insurance.
Research recently conducted by Zurich Insurance shows that that majority of people who hold insurance inside their superannuation thought that this base level of insurance was adequate coverage. 80% of people with superannuation showed a lack of knowledge of how Life Insurance within superannuation works.
Life Insurance Misinformation
The misinformation was made even worse by the many who did not know what was actually covered by their life group policy.
- 5% believed that with the life insurance policy they could claim dental and optical costs – ie. confusing their life insurance with their health insurance.
- 11% also believed that they were covered for any type of traumatic illness.
When it came to Income Protection, those surveyed were even less informed. Only a fraction of them understood how much they were covered for.
On this worrying-misinformation trend, Zurich head of marketing said, “Every individual is different. Insurance cover ideally would match the specific needs of each individual, so it is important that people understand whether or not their ‘default’ insurance option delivers appropriate outcomes matches to their precise needs in the event of a claim”
This research exposed lack of adequate information about insurance in Australia. There is a knowledge gap between the insurance providers and the consumers. The gap needs to be bridged. Because the results can be crippling as the research also showed that some Australians are experiencing real financial hardship, even having to sell their homes following a traumatic injury or illness.
The issue of Trauma Insurance is where Australian’s lack of insurance acumen became imminently apparent. Only 3% of Australians hold Trauma Cover (often called Critical Illness Insurance) with the vast majority not even being aware of its existence, let alone its benefit. With approximately 60% of Australians who hold Trauma Cover at some point making a claim against this policy, the benefit is immediately apparent. With cancer and heart disease diagnosis rates continuing to climb, it is more important than ever to consider this type of insurance.
Speak To An Experienced Adviser
The research also had a thinly veiled message, about the need for consumers to seek information from an experienced Insurance Adviser in order to get the best advice about insurance to suit their specific circumstances.
At Make A Difference Insurance we understand that navigating the variety of personal insurance options can be daunting, and this fact alone contributes greatly to the incidence of under insurance and mis insurance in Australia.
The guidance and support of an experienced Insurance Adviser can help break down many of the barriers that lead to Australians choosing to remain ignorant about their insurance needs and options.