Australian parents more likely to insure their car than their life

6 February, 2019, Sydney, Australia – Australian parents are more than twice as likely to insure their car than their life, according to startling new research from Finder, Australia's most visited comparison site.

Finder surveyed 2,013 parents about the insurance policies they hold and car insurance topped the list, with almost 3 out of 4 (71%) taking out cover for a vehicle.

Life insurance is less of a priority though, with just under 1 in 3 (31%) Australian parents taking out a policy.

Sophie Walsh, insurance specialist at Finder, says it's concerning that so many parents are leaving their families exposed.

"Thinking and talking about your family's financial position in the event of your death can be uncomfortable, but it's a conversation you should have with your partner.

"Without life insurance, your loved ones may be left to foot the bill for funeral costs, mortgage repayments, bills and any other outstanding debts. If you're the main provider, this can put your family in a vulnerable financial position."

Walsh says one of the main barriers to taking out life insurance is the cost.

"Many parents don't want to fork out for yet another another monthly premium, but life insurance can start from as little as $4 per week – which in many cases can be cheaper than the cost of insuring your car."

Check your superannuation policy

Findings from the Royal Commission reveal many Australians are paying for a life insurance policy through their superannuation but don't realise.

"Often your super will include some form of life insurance as part of the overall package, meaning you may already have a basic level of cover," Walsh says.

"Keep in mind that while it may be convenient to stick with the policy included in your super, there may be a standalone policy more suited to your needs.

"For instance, the amount of cover you may have may not be reflective of the income you earn and the size of your mortgage."

The research found that parents who own a property are the most likely to have taken out a life insurance policy, with 37% opting for cover. Those who rent are the least likely, with just over a quarter (27%) taking out cover.

"When it comes to life insurance, you don't want to be one of those people who thought, 'this won't happen to me'," Walsh says.

Insurance holders by state

Source: Finder survey of 2,013 parents with children under 12

How to ensure you have the right level of cover

• Keep track of your policy: Check your policy every couple of years to make sure it still covers all your needs. If you've recently changed jobs, taken out a loan or expanded your family, you may need to update your policy to ensure you still have sufficient cover.
• Consider your debts: Common expenses that life insurance can help cover include mortgage debt, personal loan debt and legal expenses. It's important to take these outstanding costs into consideration when choosing a policy to ensure your loved ones aren't left to foot the bill.
• Choose the right type: There are four main categories of life insurance, covering death, total and permanent disability (TPD), trauma and income protection. There's no hard or fast rule for cover, but some personal situations may require more cover than others, such as starting a family, building a home or entering retirement.