Baby Boomers and insurance

In our Published book, They said the World was my Oyster, but someone Stole the Pearl, A Baby Boomer’s guide on how to live a Life of Choice not compromise, we address the financial realities faced by those born between 1946 and 1964 and – importantly – the actions needed for this generation to enjoy their twilight years.

Financially speaking, the Boomers were hit hard by the GFC, but this was just one of the factors that impacted their financial situation. Another was their typical approach to insurance. Here’s how we talk about it in the book.

Baby Boomers and insurance
*Generally, Boomers’ personal risk insurances – including life, income protection, trauma, total permanent disability (TPD) and more – are either poorly structured or inadequate to be able to preserve their lifestyles in the case of adversity.

Market research shows that Australians are chronically underinsured when it comes to personal insurances, with the Financial Services Council estimating that the underinsurance gap for working Australians is $1.1 trillion. Illnesses where substantial time is required recuperating can have a devastating impact on personal finances where insurance is inadequate or non-existent.

Protecting what you’ve built
The major asset for all working Australians, including Boomers, is their income. Think about it. If you did not have your income coming in each payday, could you afford your:

  • Monthly mortgage payments on the house
  • Car lease payments
  • Children’s school fees
  • Food and clothing expenses

And yet, if you ask anyone what their most valuable asset is, the majority would say their house, their superannuation, or their investment portfolio. All of this is wrong, because all of these can only be obtained and maintained if the household has regular income. So the correct answer is you. You are your most valuable asset.

So what should you do?
First, you should ensure that you are fit, healthy and maintain a healthy lifestyle. The second thing you should do is insure yourself and your family.

Our income is chronically underinsured. According to riskinfo in an article entitled ‘Australia Faces Significant Disability Underinsurance Problem’ (2013), the median level of disability cover held by Australians represents just 15% of a family’s needs. Meanwhile, Rice Warner’s latest ’Underinsurance in Australia (2015)’ report found that the median level of total and permanent disability cover in Australia is 14% of that needed to fully maintain a family’s standard of living. Similarly, the median level of income protection cover is just 16% of actual needs.

While this isn’t specifically about Boomers, you can be sure that whatever the exact percentages of underinsurance, Boomers also suffer from it and maybe more so as the cost of personal insurances increases as you get older, so the easy excuse of ‘I can’t afford it’ comes to the fore.

However, risk management and personal insurances are vital ingredients of any comprehensive financial plan. Just as you insure your house, car and other property against loss, so too you should ensure that you hold suitable personal insurances. Risk insurance needs to be in place to clear debts and provide enough money for surviving family members following death. When a person is injured temporarily or permanently, risk insurance is required to replace their income to pay off debts and meet day-to-day living expenses. Risk insurance can also provide a lump sum to reduce debt when the claimant is permanently disabled.

Elsewhere in the book we outline – in accessible language – the main categories of risk insurance and provide a step-by-step guide plus checklist to help you calculate your risk insurance needs. We always advise that you check your results with an insurance professional.

* This post includes extracts from our book, They said the World was my Oyster, but someone Stole the Pearl, A Baby Boomer’s guide on how to live a Life of Choice not compromise, by Markham Collins & Russell Mann, available.

Whether or not you are a Baby Boomer, if you have a question or would like to discuss your insurance needs further, please contact Collins Mann on 07 3251 3201 or

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