Brad and Belinda-Jayne Penrose had insurance when it mattered most. Picture: Dean Martin Source: National Features
THINKING your health insurance provides you with the same coverage as life insurance is not uncommon.
New data from life insurance company TAL found one in six Australians (17 per cent) believe the two types of insurance provide similar protection.
Financial Services Council chief executive John Brogden says Australians should be "forgiven" for being confused between the two.
"Health insurance will pay for your surgery if you're sick but it won't pay your salary if you're off work for six months," he says.
There are different types of cover that fall within the life insurance umbrella:
Death cover pays a lump sum to your beneficiary if you die.
Total permanent and disability insurance pays a lump sum if you are injured or disabled.
Trauma insurance pays a lump sum if you are diagnosed with a specified life-threatening illness or injury.
Income protection insurance covers you if you are sick or injured and cannot work.
The survey that quizzed more than 1200 people found 47 per cent of respondents do not have enough money or say it's too expensive to take out life insurance.
TAL Group chief executive Jim Minto says cost of living pressures are squeezing budgets even tighter.
"There is an enormous amount of pressure on household affordability in Australia ... people are challenging their budgets for almost everything," he says.
Belinda-Jayne Penrose, 23, who works in sales and marketing, says her dad suggested she get a form of life insurance - income protection cover - when she started working full-time.She says her father's advice was a godsend.
"At the time I didn't think I'd need it, I was only 17," Ms Penrose says.
"But there were two times when I had serious illnesses and I needed to claim on it, and we had a mortgage, so we definitely needed that money. It took a lot of stress off."
Her premium cost her about $30 a month.
Ms Penrose took about a year off work and says the insurance cover helped pay her medical bills and mortgage.
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