The fact that 95% of Australian families do not have adequate insurance is likely a direct result of the “She’ll be right, mate” attitude and is also directly coupled to an over-generous social system.
The post baby-boomer generations have grown up under this system, resulting in the expectation that the Government will always be there in time of need or financial difficulty. This in turn, has led to an under-insurance epidemic!
A few statistics from the financial industry are quite sobering and have highlighted under-insurance as one of the biggest security threats facing Australians.
According to OnePath’s Insurance Fundamentals:
• One in five families will be impacted by the death of a parent, or a serious accident or illness that renders a parent unable to work;
• The typical Australian family will lose half or more of their income following a serious illness, injury or the loss of one parent as a result of under-insurance;
• Under-insurance is expected to cost the federal government $1.3 billion over the next 10 years.
As Australia’s debt levels continue to rise and the government has committed to paying down debt, the social system we have all become accustomed to will, and is very rapidly shrinking. Australians are going to have to face the fact that they are responsible for their own financial health, their financial futures and eventually their own funded retirement.
This is where the importance of a Financial Planner for every person or family will become vital. The current situation presents itself as a major opportunity for Financial Planners going forward and many are already offering better engagement with clients through marketing and social media. Ongoing contact will enhance the experience for the client and additionally build trust ensuring more families embrace risk protection strategies to help in time of need.
These are exciting times with many positive changes in store for both the consumer and adviser. Carpe diem…..