Do you need life insurance? The Facts.

It’s an interesting question isn’t it, I mean common sense say’s it’s not a bad idea.  But at what age do you take it out and what do you base your decision to start a policy on; your health and pre-existing conditions or known statistics on when and how people die?

This subject probably isn’t the most savoury one and a lot of people would rather not think about it.  But, if you have dependents and you want to know they will be taken care of if you’re not around, at some point you’re going to have to think about some of the questions I’ve just posed.  In this article I’m going to put forward statistical data to give you a clear picture of what might be right for you in taking out life insurance.

This information comes courtesy of AIA Australia, one of this country’s leading life insurance providers.  In 2014 AIA paid out $419,427,057 in death claims so the breakdown of information behind those claims should shed some light on the subject.

Cancer was, not surprisingly, the leading cause of death, accounting for almost 40% of all claims.  It made up 28% of all male claims and 54% of all female claims with 13% of this female figure coming purely from breast cancer. 

Cancer Snapshot

  • An estimated 128,000 new cases of cancer will be diagnosed in Australia this year, with that number set to rise to 150,000 by 2020 (http://www.cancer.org.au/about-cancer/what-is-cancer/facts-and-figures.html).
  • Cancer accounts for about 3 in 10 deaths in Australia.
  • The most common cancers in Australia (excluding non-melanoma skin cancer) are prostate, bowel, breast, Melanoma and lung cancer.

The second highest cause of death was cardiovascular conditions at almost 10% of total claims, with the male figure at 10% of male claims and the women at 6% of their claims.

The next most prevalent causes of death were diseases of the digestive system, stroke and respiratory conditions all of which hovered around the 4% mark and were split much the same way along gender lines.

Other causes include: Complications of pregnancy, skin disorders, infectious diseases, suicide/suspected suicide,

Endocrine disorders (e.g. diabetes), deaths referred to the coroner and musculoskeletal conditions resulting from accidents.

Now, what about the ages that all these life ending events might occur?  Well the youngest claimant was 15 years old and the oldest claimant was 76 years old.  The average age of a claimant was 48 years.  So if you’re in your early forties and you haven’t taken out a policy, statistically you could be gambling against the odds.

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Published on July 7-th, 2015 in Life 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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