The one insurance you can’t afford to skip (and one you definitely can) |
The one insurance you can’t afford to skip (and one you definitely can)
April 5, 2026 — 5:01am
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With the increased private health insurance premiums kicking in this week at an average of 4.41 per cent, many households are probably wondering if it’s really an expense that can be justified right now.
In Australia, we spend an average of between $1500 to $2000 per person, and collectively about $120 billion every year on insurance. And yet, we’re still one of the most under-insured countries in the world.
Perhaps that’s why one in five Australians say they’ve bought insurance they don’t fully understand, and half of us aren’t confident that insurers will actually pay up when we need them.
Like most things relating to personal finances, there is no one-size-fits-all solution to insurance, and not all insurances are created equal. So before you make any decisions, here are some useful things to consider, as well as some of the best and worst options to spend your money on.
Let’s start with what I, personally, think is the most important band of insurance: personal insurance. There are generally four types of cover that fall under this umbrella – life insurance, income protection, total and permanent disability (TPD) insurance, and trauma or critical illness insurance.
In a nutshell, these insurances exist to financially protect you from worst-case scenarios and guarantee that if something bad does happen, you’ll be able to maintain your current standard of living.
If I could only ever have one kind of insurance for the rest of my working life, it would be income protection.
The good news is that many superannuation policies include some level of income protection and life insurance. But the level of coverage and access........