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Most Australians are underinsured

A 2017 report by independent consultants Rice Warner* estimates the median level of life cover in Australia to be $143,500 and the median TPD cover to be $99,500. Rice Warner estimates that these medians meet just 47% of death cover needs and 14% of total and permanent disability needs. Income protection fares only a little better than TPD cover, the median level insured estimated to meet just 21% of needs.

Rice Warner’s report goes on to estimate the insurance needs for 30-year old parents with children to be:

  • 8 times family income per year for death insurance
  • 4 times family income per year for TPD insurance, and
  • 85% of family income per year for Income Protection insurance

These are estimates only based on medians. How much insurance cover you need will depend on your personal circumstances.

* Underinsurance in Australia 2017, Rice Warner Pty Ltd.

 

What to consider

When working out how much insurance cover you need, some things to consider include:

  • How much income you and your family would need to live if you couldn’t work.
  • Other types of insurance and assets you have (including how much you have in super).
  • What help or family assistance would be available.
  • Whether you have access to other assets or could sell your home and move somewhere else to reduce debt.
  • What government benefits or workers’ compensation could be available to you.

Your circumstances and insurance needs will also change over time. That’s why Mercy Super provides a range of options so you can adjust your cover to suit your personal circumstances. Learn more about Changing your cover.

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