Why Millions of Aussies Are Dangerously Underinsured

Most Australians think life insurance costs a bomb.

They’re dead wrong.

Despite 15 million Aussies contributing $17.3 billion in annual life insurance premiums, a massive underinsurance gap still exists across the country. We’re paying billions but still not getting enough coverage.

That’s millions of families walking around dangerously exposed.

The Reality Check

A healthy 30-year-old can get $300,000 in coverage for around $30-40 per month. That’s less than what most people blow on their UberEats habit.

Yet most Aussies have no clue what proper coverage actually costs.

The disconnect runs deep. Over 50% of Australians buy life insurance for their loved ones’ peace of mind, but community standards show we’re still massively underinsured. People aren’t avoiding life insurance because they don’t want it. They’re just not getting enough of it.

When You Actually Need It

Life insurance does one job: replaces your income when you’re gone.

If someone depends on your pay, you need coverage. If you’ve got debt that would land on others, you need coverage. If your death would create financial hardship for people you care about, you need proper coverage.

Simple as that.

The real issue is that many Aussies rely on their super’s default life cover without realising it’s often inadequate. Default cover might give you $50,000-$150,000, but if you’re supporting a family, that won’t last long.

Retail term life insurance fills the gap. It’s affordable, straightforward protection that actually matches your real financial responsibilities. No gimmicks, just proper coverage when your family needs it most.

The Good News About Claims

Here’s what the industry doesn’t shout about: over 90% of all life insurance claims get paid in Australia.

That’s right – when you need it most, Australian insurers actually pay up.

The industry has had two consecutive profitable years, proving it’s financially stable. Even complex TPD and trauma claims have high payment rates, though they require meeting specific criteria.

This isn’t some dodgy industry trying to avoid payouts. It’s a legitimate financial safety net that actually works.

Your Coverage Framework

Start with three questions:

Does anyone depend on your income? Partner, kids, parents, business partners – if your death would hurt them financially, you need coverage.

How much debt would you leave behind? Home loan, credit cards – these don’t vanish when you do.

What would it cost to replace you? Lost income, childcare costs, household management – add it up.

Those answers give you a coverage target. Then get quotes from multiple insurers.

Don’t rely solely on your super’s default cover – it’s usually nowhere near enough for families with real financial responsibilities.

You might discover what millions of other Aussies are learning: proper protection costs less than your monthly coffee addiction but delivers infinitely more value.

The real question isn’t whether you can afford life insurance.

It’s whether the people who depend on you can afford for you to stay underinsured.