Integrity Life has warned that the high cost of living in the latest CPI data, which recorded an overall year-on-year increase to December 2019, may have particularly harmful consequences for under-insured Australians.
The insurer says the rising cost of living is disproportionately driven by the costs of the most important, life-impacting areas such as health. While purchases of luxuries such as international travel, entertainment and clothes have become cheaper, health costs have increased by close to 200 percent since 2000, it says.
In a media release Integrity says that, at the same time, the rising cost of living means Australians are more likely to forego emergency protection products such as life and health insurance.
Integrity Life MD Chris Powell says that the latest CPI data shows Australians are facing higher health bills. “But the overall rising cost of living means they are less likely to have the very products, such as life or health insurance, that can help pay those bills. The potential impact could really set people back, which is why we’re urging Australians to check whether they are adequately insured.”
The insurer adds that Australia’s rate of under-insurance is already high and that its research shows 45 percent of Australians believe they don’t have life insurance in place to meet the costs of a disaster such as a funeral or medical care, or to support the cost of living.
“Australians must understand how important life insurance can be in minimising their rising, potentially massive out-of-pocket expenses,” said Powell.
According to Deloitte’s Global Millennial Survey 2019, “life priorities for Millennials and Gen Z include building their career, buying their own home, and starting a family. Life insurance provides security for these important elements of life, if the worst happens”, says Powell.
The insurer says that younger Australians and those around the peak of their career can take advantage of significantly lower premiums for life and total and permanent disability insurance, citing the levels which might apply to both men and women in their 40s, 50s and 60s.
Powell also points to changes to insurance inside superannuation in 2019 which mean that some people may have had their insurance removed. He suggests those who rely on insurance inside super check their cover or contact their super fund to make sure they have an adequate level of cover.
“[They] should also think about speaking to a professional risk adviser,” says Powell.