Death and illness in Australia and the importance of insurance

While the leading causes of death in Australia include cardiovascular disease, cancer, dementia, respiratory diseases, diabetes, and liver disease, there are other prevalent illnesses that significantly impact the population but may not always be reflected in mortality statistics. 

Insurance is a vital part of financial planning, providing a safety net against unexpected financial burdens. It ensures that individuals and families are protected from significant expenses and can maintain financial stability.

Population and Health Statistics in Australia

While health insurance focuses on covering medical expenses and ensuring access to healthcare, life insurance is about providing financial support for your beneficiaries in case of your death. Both are essential for comprehensive financial planning and well-being.

Health Insurance

Purpose: While health insurance covers medical expenses for the policyholder, ensuring access to necessary healthcare without financial strain.

Coverage: It includes costs for preventive care, checkups, tests, prescriptions, emergency care, surgeries, and treatments for chronic illnesses.

Financial protection: Health insurance reduces out-of-pocket expenses for medical treatments and hospitalisations, ensuring timely access to medical services and improving health outcomes.⁷

Life Insurance

Purpose: Life insurance, on the other hand, provides financial security for your loved ones in the event of your death.

Coverage: It offers a death benefit to cover living expenses, debts, and future financial needs, ensuring your family can maintain their standard of living.

Financial security: Life insurance helps pay off outstanding debts, replaces lost income, and offers peace of mind that your loved ones will be financially protected.

Estate planning: It also aids in covering estate taxes and ensures your assets are distributed according to your wishes.

The high prevalence of serious health conditions like heart disease, stroke, and cancer in Australia underscores the critical need for comprehensive insurance coverage. With over 11.3 million adults affected, the financial burden on individuals and families can be substantial.

Ensuring more Australians have adequate insurance, including trauma and income protection, is essential for financial security and peace of mind. Despite the need, underinsurance remains a significant concern. Many Australians are not adequately protected against severe illnesses and disabilities:

Life Insurance:
Approximately 55% of Australians have life insurance. This translates to about 13.75 million people with a population of approximately 25 million people.

Total and Permanent Disability (TPD) Insurance: 
Approximately 20% of Australians have TPD insurance, which is about 5 million people.

Trauma Insurance:
Approximately 10% of Australians have trauma insurance, equating to around 2.5 million people.⁸

Income Protection (IP) Insurance:
Approximately 31% of Australians have income protection insurance, which is about 7.75 million people.⁹

1  National, state and territory population, September 2023. Australian Bureau of Statistics, 21 March 2024
2  Deaths, Australia, 2023. Australian Bureau of Statistics, 10 October 2024
3  Stress and trauma. Australian Institute of Health and Welfare, 14 February 2024
4  Trauma, violence, abuse and neglect statistics. NSW Health, 22 February 2023
5  Prevalence and impact of mental illness. Australian Institute of Health and Welfare, 30 April 2024
6  Palliative care services in Australia, Trends. Australian Institute of Health and Welfare, 30 October 2024
7  Private health insurance. Australian Government Department of Health and Aged Care
8  Detailed data reveals top causes of claim for the industry, Financial Services Council, 29 July 2020
9  Ultimate Guide to Income Protection Insurance in Australia, LHD Lawyers

This document is prepared by ClearView Life Assurance Limited (ABN 12 000 021 581, AFSL 227682) (ClearView). The information is general in nature, it does not take into account your objectives, financial situation or needs. Before determining whether to apply for or hold the product(s) you should read the appropriate Product Disclosure Statement (PDS) and consider the appropriateness of the product(s) to your circumstances. This information does not in any way constitute tax, legal or health advice. Before relying on this information, you should seek independent expert advice. To the extent that law permits, ClearView, its directors, officers and employees do not make any representation as to the accuracy of any non-ClearView websites or articles referenced and excludes any liability to any person in relation to the document’s use or its content, including any modification, error or omission in the document however caused.

This document is current as at the date of publication. ClearView can vary or withdraw this document at any time. You should always check with ClearView to confirm that this document is up to date.