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Last Updated on 17 December 2020

What Happens if I Don’t Have Life Insurance?

Life insurance doesn’t just provide for your dependants in the event of your death. It can protect your income if you are temporarily or permanently incapacitated due to illness or injury, and soften the blow of major traumas, providing a reliable income as well as funds for expenses such as specialist care or modifications to your home.

Australians Without Life Insurance

The majority of Australians don’t have adequate life insurance coverage to support themselves and their dependants if anything were to happen to them. A study by global insurance provider MetLife has indicated that 70% of Australians in the 41 to 50 age bracket were very concerned about how they and their dependants would cope financially if they were to die prematurely or becoming disabled. Yet many people still have no death cover or income protection insurance, and those that do may not have enough cover to meet their family’s needs.

Life Insurance for an Ageing Population

The younger you are when you arrange your cover, the lower your premiums will tend to be, especially as future trends are likely to be towards higher premiums for everyone as the number of claims rises.

As people live longer, insurance products that cover needs arising from longevity become more important. Life insurance that includes trauma cover may help to cover the costs of a serious health problem such as a heart attack or stroke.

The trend towards a longer life also means that more people are facing the challenges of permanent disability, and that claimants may require an income for longer. However, trends in life insurance uptake have not kept pace with this, with a relatively small proportion of Australians taking out insurance policies that can help cope with the demands of advancing age. Some insurance products can also help pay for adaptations to your dwelling, such as hand-rails, stair lifts and wheelchair ramps, to help disabled policyholders get around the house.

Changing Weight and Health Expectations

Changing trends in the way that policies are calculated may mean that life insurance is now more affordable than you might think. One crucial trend is a change in attitudes to weight and health. Life insurance companies understandably raise premiums for those who have lifestyles or conditions that are especially detrimental to their health; in the past, this meant higher premiums for those with a body mass index (BMI) over 32.

With more and more Australians now overweight, insurers have turned to more nuanced ways of evaluating a person’s health. Rather than simply raising premiums for anyone over a certain BMI, they have begun to look at other indicators such as cholesterol levels and waist circumference to get a clearer idea of how fit you are. Those with a high BMI but a good overall level of fitness are now assessed at a standard premium for many life insurances. However, adopting a healthier lifestyle and being a non-smoker may still help to keep your premiums down.

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