Many Australians delay signing up for life insurance. In most cases, they do so because there is a widespread belief that life insurance is unaffordable, and that it isn’t really necessary in the first place. Both of these beliefs are mistaken, and can leave families at risk.
Research conducted on this issue reveals that many Australians have a somewhat conflicting view on the subject. While many people claim that they do not need a life insurance policy, they also self-report that they would undergo a financial struggle if the primary wage earner of the home were to become sick, injured, or die.
The irony is that Australians consider it very important to insure their important pieces of property such as their car and their home. Almost eighty percent of respondents say that car and home insurance are either extremely or very important. At the same time, less than half of respondents consider life insurance to be either extremely or very important.
At the same time, about half of the respondents also said that they would either be unable to cope, or would have difficulty coping, with the financial affects of losing income for a period lasting longer than three months as a result of an injury, disease, or death.
Oddly, the results seem to indicate that people are willing to protect there cars and homes, but they are much less willing to protect the income that they provide to their families. To truly understand whether a life insurance policy makes sense for you, you need to ask yourself if your family would be able to cope financially without your income. If not, life insurance is a necessity.
Most people also drastically overestimate the costs of life insurance. When asked to estimate the costs of life insurance, forty percent of the respondents had no idea what the life insurance premiums cost. Those who were able to provide an estimate ended up guessing that it was between 50 and 65 percent higher than it really was.
In reality, life insurance is actually quite affordable, and the costs are well worth the piece of mind that comes with it. The costs are generally higher for males, and higher for people who are older. Even so, a forty-five year old male who doesn’t smoke and works an administrative job can expect to pay only about $35 each month. At 25, a male can expect to pay only $25. These costs are well within most people’s budget.