24th April, 2014

Australians ‘need to act’ on financial survival fears

Australians are aware of the potential problems caused by illness and injury to their family's financial wellbeing, but many still fail to protect against unforeseen circumstances.

This is according to recent Financial Services Council (FSC) research, which highlighted a disconnect between the fears people exhibit over their financial security and the number of underinsured households across the country.

An FSC survey showed 90 per cent of working-age Australians have considered the impact of loss of income from an event such as injury, illness, disability or death. However, only 47 per cent of respondents have taken any action. Furthermore, 71 per cent agreed that it is their responsibility to ensure their family has enough money to live on should they be unable to continue working.

"Triggers for considering how to ensure income in the event of being unable to work due to illness or injury anchor more on specifically related events: loss of job or income and sudden illness or injury," the FSC report read.

"It's as if Australians consider income protection once the need has already arisen … by which time it's too late."

More than half of respondents say they consider income protection policies to be too expensive, while 24 per cent claimed there is a low chance of needing them.

However, income protection can be particularly important in the trades, as the risk of work-related injuries is typically higher than many other professions. This is why investing in comprehensive tradesman income protection is a vital part of any insurance policy tradies take out.

Not only will income protection provide up to 75 per cent of income throughout illness and injury, it also covers for incidents that occur outside of the workplace. There are also options to receive partial payments for tradies who are able to take up part-time work during the road to recovery.

Author: Murray Bruce