Sydney, 3 November, 2006: The Australian Bankers’ Association (ABA), the Insurance Council of Australia and the Investment and Financial Services Association (IFSA) have today launched a plain English financial literacy booklet about insurance for consumers.
The free booklet is titled ‘Smarter Insurance – Protect your assets and secure your future.’
The three organisations hope the information provided in ‘Smarter Insurance’ will provide consumers with useful information to assist them in understanding insurance and the vital role that insurance plays in protecting individuals, families and the things people own.
Insurance is all about managing risk and reducing the effect of financial loss in the event that an accident, theft or disaster occurs. The booklet provides practical answers to commonly asked questions about insurance, such as what it is, where do I get it, what insurance products are available and which products people may need.
David Bell, Chief Executive of the ABA, said: “It’s important that we all think about our financial and life circumstances and how we can reduce the risk of financial loss so we can better protect our families, loved ones, assets and lifestyles.”
“While we will all have different needs at different stages of our lives, insurance can help manage those unexpected events that may otherwise mean you have to dive into your savings or find other ways to make ends meet.”
“Insurance can protect you from financial difficulties, for example, it can cover replacement of home contents after a burglary, provide income if you get sick and can help you repair your car after an accident.”
Chief Executive of the Insurance Council, Kerrie Kelly, said: “Insurance is a critical part of the Australian way of life and the economy because it underpins the activities that enable the community to go about their everyday lives.”
“The Insurance Council is pleased that ‘Smarter Insurance’ provides a practical guide for consumers that tackles head on the issue of non-insurance and under insurance. As an industry we need to work closely with the community and Government to educate and understand the very real risks of people not having insurance.”
IFSA Deputy CEO, John O'Shaughnessy, said: "'Smarter Insurance' is a 'must-read' for Australian families. IFSA research shows that the cover held by those with life insurance through their Superannuation represents just 20% of the cover that most families need.”
"Average full-time workers in their mid-thirties with young children need life insurance cover to provide for around 10 times their taxable earnings - however only 4% of those with dependent children have this level of cover. Of most concern is that 60% of Australian families with dependent children have not got enough life insurance cover to look after their loved ones for more than one year if they were to die."
"When it comes to protecting income, small business is another sector that is drastically underinsured. In fact almost 70% of people in small business do not have income protection at all, despite its tax deductibility- and just 25% could maintain their lifestyle for more than six months if they suffered serious illness or disablement.”
"A major finding in recent research conducted for IFSA was that 47% of the small business people surveyed in Australia were completely unaware that income protection is tax deductible. Tax deductibility helps make these products more attractive and more affordable", Mr O'Shaughnessy concluded.
The ABA, Insurance Council and IFSA are committed to the ongoing financial education of the Australian community.
The publication is available on three websites or by calling the numbers below for a copy to be sent in the mail:
For further information:
ABA
Heather Wellard
Phone: 02 8298 0411
Mobile: 0409 830 439
Insurance Council
Paul Giles
Phone: 02 9253 5160
Mobile: 0415 131 005
IFSA
Emma Grainge
Phone: 02 8253 2517
Mobile: 0407 469 114
ENDS