When Debbie Wilson* heard on a knock on the door, the last thing she expected was to learn her husband had passed away.
"Bill was just 32" recalls Debbie. "He had a massive heart attack at the wheel of his car and died instantly. There was nothing to suggest it was coming. In the blink of an eye we went from being a regular Australian family to a single parent household facing a mountain of bills."
Debbie's husband had been coaching their son Philip's under-6 soccer team, and following Bill's death the team's families rallied around to provide financial support. Nonetheless Debbie struggled to cope, and five years on she is still regaining lost ground.
Like many Australians, Bill had life insurance through his super. But it wasn't enough to meet household expenses including the loan repayments on the family's Sydney home.
Industry research confirms this is often the case. The median level of life cover through super is still only 66% of basic needs and 41% of the amount required to ensure family members can maintain their standard of living after the death of a parent or partner.1
60% will run out of money within 12 months
Worryingly, 60% of families with dependents will run out of money within a year if the breadwinner dies.
The impact of financial trauma makes a tough time even more challenging for families coping with grief. Yet the problem can easily be avoided. Taking out additional life insurance or topping up your existing cover is often surprisingly affordable.
It's not just life insurance that today's families should consider. A range of personal insurances including income protection cover and trauma insurance, provide a financial lifeline when the unexpected occurs.
As Debbie Wilson explains, "We always assume these things will happen to someone else. The reality is that disaster can happen to each of us."
Protect your family
None of us knows what tomorrow will bring, which makes it worth reviewing your personal insurance cover today.
Your Mortgage Choice financial adviser can help you work out the types and amounts of cover that will offer protection for your family.
*All images and names are for illustration purposes only
1Rice Warner media release: Life insurance gap reducing industry must evolve to meet changing customer needs, December 2012.