Mid 40s: Trauma Insurance Danger Years

Australians are most likely to cancel their Trauma Insurance at the very point in their life when they are most likely to need it, according to research recently conducted independently by two of Australia’s leading Insurance Companies, TAL and Asteron.

The average age a person is diagnosed with a life-threatening illness in Australia is 49 and statistics show that the mid 40s is the age at which people are most likely to claim on their Trauma Insurance and disability cover.  Worryingly, the age at which Trauma Cover is most critically lapsed is 44, which is leaving many Australians exposed financially during the highest risk years for serious illness.

Average Age of Cancellation

The TAL review shows that their TPD, Trauma Insurance and Income Protection policies are most commonly discontinued when the client is aged 45, with the average age of claimants being 46.5.  A very concerning trend that is leaving many Australian families exposed financially.

With respect to Income Protection, TAL’s research shows that 1 in 2 claims are made within 24 months of the policy being taken out.

The average lifetime of a Trauma Insurance policy is approximately 7 years.

Why Do People Cancel Their Trauma Insurance?

There are undoubtedly lots of answers to this question. People’s circumstances change as do their needs.  The most common reason is generally thought to be meeting the rising costs of premiums at a time when the cost of living is also increasing.

Unfortunately, many people still do not see protecting their financial future with personal insurance as essential.

TAL Group CEO, Jim Minto:  “We know that cost of living pressures are continuing to force people to rethink their domestic budgets but it is very unfortunate that those people who stop their policies for this reason do not see financial protection as essential for themselves and their families,” Mr Minto said.

In April 2013, Asteron Life released a similar analysis of its claims and lapse data in April 2013. Asteron Life Executive Manager, Mark Vilo. explains “It’s startling to think that, just a few years prior to that, allowing protection to lapse means many customers may unwittingly leave themselves and their families financially exposed.”

Talk To Your Adviser Before Cancelling Your Trauma Insurance

If you are considering allowing your Trauma Insurance to lapse, it is important to talk with your Insurance Adviser who can help you with your options.

Further reading:

Australia’s No. 1 Killer
Are You One Of The 60% of Underinsured Australians?
Trauma Insurance Within Super Ends 1 July 2014