Aussie small businesses may be left vulnerable by underinsurance

Almost half of Aussie small business owners say their business would barely last out a year if something happened to them, a worrying report from life insurance company, MetLife Australia, has revealed.

The MetLife Adviser-Client Relationship Report 2018 revealed that while 63% of small to medium businesses surveyed had income protection insurance and 58% had death cover, other important elements of a sturdy insurance portfolio, like Key Person, Trauma and Buy/Sell insurance were missing.

“SMEs are the lifeblood of the Australian economy, making up almost 40% of GDP, but these results show that many are leaving themselves exposed to financial hardship or even business failure if they experienced any business interruption,” said Matt Lippiatt, MetLife Australia Head of Retail Sales.

RELATED: How much life insurance do you need?

Mozo Director Kirsty Lamont agreed that small business owners needed to have one eye on the future when it came to insurance.

“It’s so important for Aussie small business owners to make sure they’re adequately insured,” she said.

“Thorough research and a clear understanding of what policy cover you need and how much you need to be insured for is something everyone should take the time for, but it’s especially important if a business is relying on you.”

Tips to get the right life insurance

Understand what you’re getting into.
Knowledge is key when it comes to getting insurance right, and that means doing your homework. Make sure you understand a policy thoroughly before you sign up, and that your beneficiaries know what to do if they ever need to make a claim. It’s also worth educating yourself on life insurance in general, so you know what you’re looking for. You can start in our life insurance guide section.

Consult an expert.
According to Lippiatt, “...having a trusted adviser who can provide education on the right type and structure of insurance cover related to their business can make a big difference,” for SMEs. So if you’re new to all this or you feel like you’re not as savvy as you could be, it might be worth getting in touch with a financial adviser to get their opinion on your life insurance set up.

Compare your options.
As a rule of thumb, never sign onto the first insurance you get a quote for. Not only could there be a better price out there, but you might also be able to find a policy that’s a better fit for your needs. And the good news is you don’t have to spend hours searching for the best options - start by comparing some life insurance offers with Mozo today.