Don’t be underinsured
Rice Warner Actuaries calculates that 95 per cent of families do not have adequate insurance,ii yet the chances of your being unable to work may be higher than you think.
In 2008, 235,790 working age parents suffered a serious illness or injury and more than 17,000 of them were forced to stop working either permanently or for an extended period.iii
However, the median level of TPD protection provides just 14 per cent of what is really needed to maintain the standard of living of a family making a claim.iv
If you have any queries about your current level of protection, the Advisers at Inspired Money can help you work out how much cover you need for your family and whether it should be inside or outside super.
While existing policies will be grandfathered, it is still worth considering looking outside super for TPD insurance cover given that you may encounter problems accessing your payout when you need it.
It may seem like a small change, but the removal of one word has presented a great opportunity to check that your insurance has got you adequately covered.
i. http://www.iknow.cch.com.au/#!/topic/tlp403/document/atagUio933061sl54074167/legislation/superannuation-income-stream-benefits-taxation/section-301-40-superannuation-income-stream-taxable-component-is-assessable-income-15-offset-for-disability-benefit
ii. http://www.lifewise.org.au/downloads/file/aboutthelifewisecampaign/2010_0203_LifewiseNATSEMSummary A4FINAL.pdf Go to page 5
iii. http://www.lifewise.org.au/downloads/file/aboutthelifewisecampaign/2010_0203_LifewiseNATSEMSummary
A4FINAL.pdf
iv. http://ricewarner.com/newsroom/2013/december/02/rice-warners-latest-underinsurance-research-report/
