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Getting the right policy
It isn’t difficult to find a life insurance or income protection insurance policy in Australia. There are numerous general insurance companies that offer complete ranges of products.
The difficult bit is finding the right policy at a price you are willing to pay and satisfying your needs.
This is where our consultants becomes an asset. We will gladly answer all your questions about the different types of policy and how they will benefit you.
Why Are So Many Australians Underinsured?
Most people find it hard to believe that many Australians are underinsured since Australia has a high uptake of general insurance plans.
Moreover, since Australia is one of the most advanced countries in the world most people presume that people are well insured and well protected against a variety of risks such as loss of income or loss of life.
This is not true; in fact Australia is ranked as the 16th nation amongst the various advanced nations for life insurance uptake. Now you may be wondering what are the main reasons so many Australians are underinsured
4 Common Reasons for Australians Being Underinsured
- High premiums for personal insurance plans.
- Lack of understanding the types of insurance products.
- Lack of trust in insurance advisors.
- A wide spread belief that bad things will not happen to me; hence I do not need insurance.
Why are Premiums So High for Personal Insurance Plans?
Personal insurance include income insurance insurance, life insurance , total and permanent disability or tpd insurance and trauma insurance plans. But do not include home and contents insurance . They are premium plans meant to help you during hard times where you may need financial support. Premium rates can be on the higher side if you select a policy that is not ideal for you. Most people tend to tick all the boxes while filling in application forms for insurance and may mistakenly state that they are a smoker when they are not a smoker. Ticking the wrong boxes that are not applicable to you can cause an increase in premiums. Carefully reading the application form, understanding what options you have to mark can help you get a policy within your budget.
What Factors Affect the Premiums I Pay to the Insurer?
High risk buyers are people who smoke, have pre-existing health conditions or have a blue collar job. High risk buyers can expect to pay higher premiums compared to the average white collar employee who doesn’t smoke and doesn’t have any pre-existing health conditions. Gender, age and habits also influence the total amount you will have to pay towards premiums. Tax concessions and superannuation plans can also influence the total cost of the policy. Opting for a standalone plan or an add on plan can influence if you get tax concessions or not, for instance standalone income insurance plans and superannuation income insurance plans have tax benefits. You may not be eligible to enjoy tax benefits of you opt for an add on plan such as a TPD or trauma insurance plan along with your income insurance plan.
How Can I get the Right Insurance Plan for Me?
The simplest way to get a good cover is to understand where you stand financially, what help you will need from the insurer in the case of insured events and how much help you will need. While most people believe that there are no down sides of being over insured, this can cause your premiums to increase significantly. When in doubt, consult an insurance advisor since insurance advisors are experienced individuals who know the nitty-gritties of insurance plans and can help you select a plan that will protect you without burdening you financially.
Why Don’t People Pursue Financial Advisors?
While some people don’t feel the need to get advice before opting for a policy, others mistrust financial and insurance advisors. The financial advice industry has changed significantly in the last few years and due to this change buyers can now have an improved experience while getting genuine advice. Insurance advisors are transparent, offer meaningful advice that can help you save a significant amount of money on premiums. Insurance advisors may also be able to help you understand how to get tax concessions on income insurance plans or how to make maximum use of the benefits offered by personal insurance companies.
Can the Insurance Industry be Trusted?
The insurance industry has made a total pay-out of 4 billion dollars in claims the last year alone. Approximately 98.50% of the claims have been paid out while only 1.50% claims have been rejected. Most people fail to realize why claims get rejected hence they tend to blame insurance companies for rejected claims. Claims can be rejected for various genuine reasons such as failure to disclose information or not being eligible to receive certain benefits.
Why Should I Get Insurance when Nothing Will Happen to Me?
While everyone would like to believe that bad things cannot happen to them and they will be healthy for a long time or will have a steady job till they retire, the truth is that most unfortunate events occur when people expect them the least. While it is nearly impossible to prevent bad things from happening to us, we do have the power to protect ourselves adequately so that we do not have to be the victim when something bad happens. There are various insurance plans offered to buyers in Australia and these plans are created keeping in mind the needs of different people. Insurance plans these days are flexible and can be customized or tailor made to suit your personal and financial needs. This means that, you will be in control of your policy, you will be making the decisions and you will be protected when something happens that is not in your control.
How Much Cover is enough?
If you can afford high premiums then you should consider opting for the best policy you can for two reasons. The first reason is that you will be protected adequately when you need financial help and the second reason is that you will have peace of mind knowing that your insurer is backing you at all times. If you want to purchase an insurance plan within a limited budget then you may either want to contact an insurance advisor who can calculate just how much insurance you need or you should do your research and use online insurance tools to understand how much insurance is adequate for you.
Income Protection Life Insurance