Insurance - your choice to make

As the recession begins to take its toll and we look for ways to try and save money items, such as insurance seem a luxury and we often tend to cancel these without giving it further thought.

Most Australian's don't bother with insurance; in fact Australia is the most underinsured nation in the developed world.

The reason for taking out insurance is to make sure that you are able to pay in the event of something going wrong. However for many of us if we don't work we have no income. When all else fails you may be eligible for social security benefits but will this be enough to meet your needs?

Income Protection Insurance

Income protection insurance pays you an amount of money usually, monthly if you are unable to work because of sickness or injury. It can provide security. Here is a case example:

There was an accident between two motor vehicles where one driver was killed, while the other received head and neck injuries, which left him with permanent short-term memory loss and a lot of pain physically and emotionally.

The gentleman concerned was a manager earning, more than $100,000 a year, he has a wife and four siblings. As a result of the accident the gentleman became unemployable. Fortunately for this him, ten years before this accident happened he took out income protection insurance and over the 10 year period paid around $9800 in premiums. It is now 14 years since the accident, and the gentleman has received more than $1.1 million in benefits and this is likely to continue till the age of 65.

Everyone thinks that this will never happen to them, but you never know what may await you around the corner.

In a recent survey it was found that 89 percent of Australians aged between 25 - 65 said they had no need for insurance, as they were not likely to have an accident. Statistics have however shown that three in four Australians will be diagnosed with a serious illness in their working life.

Pet Insurance

Another insurance to consider is pet insurance. Believe it or not Australians spend around $4 billion a year pampering their pets, but only about 2 per cent insure them.

Animal lovers do not realize that if mans best friend were to get injured in a fight with another dog, it would easily cost around $1150 to get him treated. The RSPCA claims that with pet insurance, you would save around $920.

So do yourself a favour and consider insurance for your family, dog or cat to help with eligible vet bills so that all the family can be covered.

Motor Insurance

Another important insurance is motor insurance. It provides essential cover against claims for compensation if you injure or kill someone in a motor accident.

If your car is not worth much then you may think of taking out CTP insurance, however it doesn't cover you for damage caused to other people's property in the event of you hitting an expensive car.

Comprehensive car insurance is the best cover options but also the most expensive. It includes the cost of repairs or replacing your car, even if you are at fault.

The other insurances that you may wish to consider are health insurance and travel insurance. Just click on our icons for further information.

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Published on April 4-th, 2009 in Insurance
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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