Do you have adequate financial protection? Survey shows most Australians are overconfident

According to life insurer TAL most Australians are falling “victim” to over confidence about the adequacy of their life insurance cover, as research has shown Australia has a huge underinsurance gap.

The survey asked 1,266 Australians aged between 18–69 years old about whether they felt they had adequate financial protection and half of the respondents felt they had enough cover.

TAL Group CEO Jim Minto said this was surprising, as a lot of actuarial research has indicated they don’t. “In our experience, a number of common misapprehensions can give rise to a false sense of security.”

“There is the mistaken belief that life insurance is a single, one-size-fits-all solution. It isn’t because every person’s and family’s circumstances are different, and different types of life insurance serve different purposes.”

Minto warned Aussies not to believe that life insurance in superannuation automatically provides sufficient protection alone as “unfortunately most people just retain the low, default level cover without assessing their personal needs.”

“Often people seriously underestimate how much money they will need if they are unable to work again,” Minto said.

Minto made the below suggestions to ensure you’re covered:

1. Check your life insurances at least once a year to make sure you have the right types and amount of protection

2. Ask for help so you can have the peace of mind that you have adequate cover rather than just hoping for the best

3. Check how much cover you need, as you may need a combination of life, income protection, critical illness and total and permanent disability insurance