What is Underinsurance?

Adequate life insurance cover is an effective means of ensuring that you or your loved ones will be able to continue on with your lifestyle and your plans on your terms into the future. Each one of us faces the risk that our assets, lifestyle or income earning capacity might be lost due to an accident, illness, disability, or death.

Surprisingly, only about 20% of Australians have adequate life cover – that is, enough cover that if the insured person were to die or become unable to work and earn an income, their financial commitments could be met and their family would be taken care of. [1]

Underinsurance or insufficient cover could mean that you and your loved ones are not adequately protected in case of illness, accident, disability or death. This could result in - among other things - the loss of the family home, the loss of retirement savings, great financial stress and the inability to continue with a comfortable lifestyle.

1. A Small Price To Pay To Avoid Financial Ruin / Businessday.com.au August 2, 2008