No one knows what is going to happen in the future. We never know when a life-changing event is going to occur, and if 2020 isn’t the perfect example of this, what is.
Many Australians struggle with the uncertainty of the future every day. However, they can simply minimise their risks with a range of personal accident & health insurance products. By purchasing A&H Insurance products, you can at least add some sort of certainty to an inevitably uncertain future.
Research undertaken by ANZ (Australian and New Zealand Banking Group) in 2005 and 2015 respectively has shown that financial literacy and understanding the importance of holding personal insurance in Australia, has grown significantly. While the percentage of Australians who have income protection insurance doubled during the 10 years, we are still seeing less than 40% of Australians taking out income protection insurance.
However, exact statistics on how many Australians hold personal A&H insurances -such as Income Protection & Total and Permanent Disability (TPD) – differs widely depending on who undertook the study and the group of respondents.
We have more information on the Australians who have made claims with their A&H insurance, and why.
It is important to understand the main reasons why Australian do take out a range of different A&H insurance products before you decide what on what kind of insurance product you would like to purchase.
Many Australians have noted that the four main reasons are Medical Bills, Living Expenses. Loan Repayments & Household chores, and we will explain why.
Medical Bills: Whether you have fallen and broken an ankle or you are diagnosed with a severe illness that prevents you from working, both short-term or long-term, you could likely be out of pocket for some medical expenses, such as medications or the cost of treatment. While Australians are lucky that a large amount of hospital bills are covered, there are gaps to pay and many extra items, like pharmacy medications, while subsidised are not free. Cover such as income protection can take away some of this burden by providing income when you are unable to work.
Household Chores: If you have a partner, then they will be likely to find themselves responsible for the household upkeep, while you are unwell. However, if you do live on your own, insurance can give you the resources to pay for someone to keep on top of your domestic duties. This way, you will not feel any pressure to do the housework yourself and slow down your recovery.
Living Expenses: A&H Insurance can mean that no matter what happens to yourself or your family that your basic living expenses are met, and you can maintain your standard of living. This will let you focus on recovering rather than your outgoing expenses, like food and clothing.
Loan Repayments: Are you paying off a mortgage, a car or a credit card? If you are sick or unable to work again, you will need to ensure you can pay off or keep paying your debts so that you do not fall into financial strife during an already difficult time in your life.
While these are the four main lifestyle reasons that Australians take out any kind of accident and health insurance, some Australians get insurance because they consider the likelihood of them or their partner actually becoming seriously ill or injured. They look at what disease or illness they are statically more likely to suffer from. For example, since the top cause of death claims in Australia is cancer, many people take out insurance because they are aware of how statistically common a disease such as cancer is.
Looking at the main reasons people make a claim on their insurance can also help us to understand the more specific reasons, other than the four main reasons above, why someone might choose to purchase insurance. Men are more likely to get into an accident, but the woman is more likely to claim for musculoskeletal conditions.
While it is important for consumers to know what they want to get from their insurance before they purchase, it is also important for an insurance underwriter or company to understand why people feel the need to purchase income protection, TPD and life insurance. This can ensure that that person purchases the right insurance for their concerns and needs.
Looking into the main reasons Australians are thinking about personal A&H insurance products can also inform the broader public on reasons why they should be thinking about it too.