It really does matter that you’re not over insured or underinsured. With the former, you risk paying too much in insurance fees, and with the latter (a more common issue among Australians), you will see a gap between the amount of insurance you need and the amount of insurance you hold.
In fact, research by RiceWarner reveals that there has been a significant increase in the amount of insurance cover provided to Australians through super funds over the last 10 years, but in light of the current insurance landscape and the COVID-19 pandemic, the underinsurance gap has widened since 2017.
That’s why it’s important to work out how much insurance is enough. It may feel like you’re asking, “How long is a piece of string?” and the answer is actually the same. It depends, so here are a few things to consider.
What would you do with your insurance money?
Apart from your mortgage, other debts, ongoing living expenses and maintaining your quality of life, there may be other expenses unique to you.
How often do you review your insurance needs?
Just like your super, insurance is also not a ‘set and forget’ thing. As your personal and financial circumstances change, so will your insurance needs.
Do you need additional cover and can you afford it?
Additional cover comes at a cost, so you also need to consider what level of cover is financially viable for you to afford.
Come and speak with us so you have peace of mind that your cover will be in place when you may need it most. Contact us at 08 8231 4709 or at info@centrawealth.com.au
Article reproduced from russellinvestments
