The headline fact emerging from new data released this week is that more than one in five working age parents will die or become seriously ill or injured.
New Lifewise/NATSEM research has found that a typical Australian family will lose half of its income if a parent dies or is unable to work due to serious illness or injury, and that one in five Australian families will suffer the death of a parent or a serious accident or illness that renders a parent unable to work.
The Lifewise/NATSEM Underinsurance Report also found that the underinsurance of parents with dependent children and a mortgage will cost the Australian Government an estimated $1.3 billion in additional social security payments over the next ten years.
… 95% of families do not have adequate levels of insurance cover
The report also found that 95% of families do not have adequate levels of insurance cover.
Commenting on these key findings, IFSA Chief Executive, John Brogden, said, “This groundbreaking research shows that the likelihood people will be unable to provide for their family due to accident, illness or death is much more common than people think.”
Further findings from the study include:
- Over one million working age parents will die, become seriously ill or injured and be unable to work at some stage during their career
- Every day, over 65 families are impacted by an event that seriously affects their ability to earn an income and support their kids
In terms of impact on the ‘typical’ Australian family, the report revealed:
- Based on current average levels of insurance, the typical Australian family’s weekly income will be cut by half to about $600 where a main breadwinner Dad becomes temporarily ill or injured and can’t work, or where Mum dies or becomes temporarily or permanently disabled
- The family’s financial situation following the event will be long term, remaining broadly the same over a one, five and 10 year period
The challenge for advisers, dealer groups and insurers will be to find a way to secure the attention of working age parents to ask them whether they are prepared to gamble that they will not fall into the more than 20% of this huge demographic that will experience death or a serious accident or illness.
Advisers can click here to access a summary of the Lifewise/NATSEM Underinsurance Report.