We are living in a time where there is an abundance of health awareness and an increasing amount of education and statistics published about the risks and long-term impacts of various illnesses and diseases. In 2019, it’s almost hard to ignore the onslaught of information about the health issues impacting Australians physically, mentally and financially.
So, why in a time when messages about cancer, heart disease, stroke, and other major health issues are adorning our buses and trains, roadside billboards, flooding our social media newsfeeds and regularly featuring on the news and radio, is Australia proven to be one of the most under-insured nations in the developed world?1 Is the common “she’ll be right” colloquialism standing in the way of Australians adequately preparing for life’s unexpected events? Have we developed a false sense of security about our health and our ability to manage financially, for an unexpected event we assumed would never happen to us?
There is a lot of information about the health issues affecting thousands of Australians every day, but is there enough about the actual out of pocket costs we may be faced with? And if we really grasped what the financial impact of falling ill could be, would we in turn make more informed decisions about our financial protection?
What devaluing your health could cost you
If you have ever heard someone say, “I can’t afford to get sick right now”, they’re most likely talking about the financial impact being unwell would have on their ability to work and earn an income, which affords lifestyle expenses, paying the mortgage, bills, medical treatment, and more.
In Australia, this is what an average day looks like2:
850 babies are born
450 people die
380 people are diagnosed with cancer
170 people have a heart attack
100 people have a stroke
14 people are newly diagnosed with end-stage kidney disease
1,300 people are hospitalised due to an injury
8 women and 2 men are hospitalised due to assault by a spouse or domestic partner
Of those numbers, one in every three Australian men and one in every four Australian women will be diagnosed with cancer. The most commonly diagnosed cancers being prostate, breast, bowel and melanoma3.
The average lifetime costs by cancer type for individuals aged 15 years and older are as follows4:
$95,460 for head, neck and thyroid cancers
$74,600 for lung cancer
$51,460 for bowel cancer
$36,800 for prostate cancer
$36,040 for breast cancer
$20,360 for melanoma skin cancer
These costs include out of pocket costs associated with a diagnosis. The cost of treatment, travel, time off work and more, but it doesn’t stop there, the financial burden of a serious illness or disease often extends beyond the patient too. It’s reported the average overall cost to the household is an estimated $48,0005. 72% of cancer carers report a negative financial impact of caring and more than half of carers who work full time will also have to leave their job or reduce their working hours6.
And yet, whilst 83% of Australians have insurance for their car, only 31% insure their ability to earn an income7.
Crowdfunding, a band-aid fix?
More people, both across the world and in Australia are having to turn to crowdfunding websites such as GoFundMe to raise money needed to afford expensive surgeries, treatment and other medical bills which come with having a serious illness. In short, crowdfunding websites provide free platforms where loved ones and family members can create pages and implore others to donate to their cause.
A visit to the Australian GoFundMe website will tell you they are the leader in online medical fundraising, with 250,000+ medical campaigns per year, raising over $800 million+8.
Whilst these platforms provide an opportunity for greater access and funding needed for treatment, publicly speaking about personal medical issues and desperately rallying for friends, family, colleagues, and even strangers to donate money, is not for everyone.
Whether you would rely on crowdfunding or not, the real statistic to take away from the above is the alarming amount of medical campaigns per year. This once more shows how prevalent illness, accidents and death are in our society and the increasing financial impact it has on Australians and their loved ones.
Are you underinsured?
Many Australians don’t even realise they may be underinsured assuming that the cover they have in their super will help if and when the unexpected happens.
Did you know life cover in superannuation is generally only 30% of the recommended level for an average young family9? What’s more, the default level of insurance cover in superannuation is designed to provide members with a basic level of cover, and critical illness (trauma) cover is usually not available through superannuation. In fact, super funds have not been allowed to offer trauma cover to new members since mid-201410.
If you suffered a serious illness, lost your job or passed away, would you or your family have to sell your home, are you adequately covered, or would you have enough savings to see you through financial hard times?
As of July 1, 2019, new super reforms will also come into effect and will see the default life cover in super accounts which have been inactive for 16 months switched off, unless members opt-in to retain their insurance or reactivate their account, under the government’s new ‘Protecting Your Super’ package. So, if you have been out of the workforce or are a parent on parental leave, you could be at risk of losing your life insurance in super.
Don’t assume you’re covered. Investigate your cover in super today so there are no nasty surprises if you ever need to make a claim.
You can find out more about your superannuation through the Australian Taxation Office myGov portal, here.
Make an informed decision
If you’d like to ensure you’re making an informed decision about your financial future and to ensure you’re adequately covered should something happen to you, you can find a lot of information on ASIC’s MoneySmart website. You can also reach out to your local broker today and ask about an ALI Group Loan and Mortgage Protection Plan – which is available to help you mitigate the risks of taking out a large debt.
Alternatively, visit our website and learn why ALI Group is the leading provider of loan and mortgage protection to Australian home and property buyers and how we are here for you, when you need it the most.
You can also hear from real Australians who have had to make a claim when they never thought they would and how having a protection plan in place saw them through hard times.
About Emma Flanagan
Emma is the Marketing and Communications executive at ALI Group. After completing a Bachelor of Communication with a Major in Journalism, Emma spent a couple of years living, travelling and working abroad before making her way home to Australia. Now, with firm roots back in her home town of the Central Coast in NSW, you will usually find her somewhere laughing with her family and friends, wining and dining with her Fiancé or by the ocean with her beloved, miniature dachshund, Lulu.
1 Lifewise [accessed at: http://www.lifewise.org.au/facts-research]
2 Australia’s health 2018: in brief report [accessed at:https://www.aihw.gov.au/getmedia/fe037cf1-0cd0-4663-a8c0-67cd09b1f30c/aihw-aus-222.pdf.aspx?inline=true]
3. Zurich, the Cost of Care whitepaper, pp.11 – 12 [accessed at: https://www.zurich.com.au/advisers/tools-and-resources/cost-of-care.html]
4. Zurich, the Cost of Care whitepaper, pp.11 – 12 [accessed at: https://www.zurich.com.au/advisers/tools-and-resources/cost-of-care.html]
5. Zurich, the Cost of Care whitepaper, pp.15 – 16 [accessed at: https://www.zurich.com.au/advisers/tools-and-resources/cost-of-care.html]
6. Same as above
7. Lifewise, Most Australians don’t value their most important asset [accessed at: http://www.lifewise.org.au/facts-research]
8. GoFundMe [Accessed at: https://au.gofundme.com/start/medical-fundraising]
9. Rice Warner, Underinsurance in Australia (2015)
10. ASIC, Money Smart [accessed at: https://www.moneysmart.gov.au/insurance/life-insurance/trauma-cover]
Loan Protection Plan is jointly issued by Hannover Life Re of Australasia Ltd ABN 37 062 395 484 (Death, Terminal Illness, Living and Accidental Injury Benefits) and QBE Insurance (Australia) Limited ABN 78 003 191 035 AFSL 239545 (Involuntary Unemployment Benefit). It is distributed by Australian Life Insurance Distribution Pty Ltd ABN 31 103 157 811 AFSL 226403 (ALI). ALI receives commission for each policy sold. Any advice provided is of a general nature only and does not take into consideration your personal objectives, financial situation or needs. You should consider the Product Disclosure Statement
(available at www.aligroup.com.au) when deciding if this product is appropriate for you. © ALI Group 2019.