Couples or families relying on two incomes could hit dire financial straits if one income earner was unable to work, but many individuals in that situation aren’t adequately insured for such a situation.
A recent survey of consumers with life insurance who are married or in de facto relationships by MetLife found that 58 per cent wouldn’t be able to maintain their existing lifestyle for longer than two years if the secondary income earner couldn’t work.
Of insureds in relationships, 73 per cent had more than one income earner in the household. A significant number of secondary earners were casual or part-time workers, of which 48 per cent of women and 25 per cent of men were the parents of the dependents.
The survey also found that these workers held lower levels of insurance than their full-time counterparts in all categories, as well as being less confident in explaining the various features of life insurance to a friend or colleague.
MetLife Australia head of retail sales, Matt Lippiatt, said that both these levels of underinsurance and the lack of preparation for losing an income were concerning giving how many households were dependent on second incomes.
“Particularly for families with children, if one partner is staying at home or working part-time, it can be just as important to insure them as it is the primary breadwinner,” he said.
“Consider, for example, the cost of finding appropriate childcare or the possibility of the main income earner having to reduce their working hours to help take care of children or a sick partner.”