What is it about the Australian character that we all think that we will win the Lottery but we or our loved ones won't die prematurely or suffer a major health problem throughout our lives? Do we really believe that only good fortune will shine on us?

After 20 years in the insurance industry it bemuses me when I deal with clients that they all seem to believe that they will only experience good fortune such as winning the lottery yet on the other hand will not experience any bad luck with cancer, ill health, premature death etc.

This national optimism which is personified in the Australian expression "she'll be right mate" has some fairly alarming consequences when it comes to Australians and their attitude to insurance.

Many of us working in the insurance industry refer to an Epidemic of Underinsurance with large numbers of families and individuals significantly at risk when it comes to coping with the consequences of a partner's premature death or a long term illness preventing continuous employment.

Life is fragile, unpredictable and sometimes good fortune smiles on one individual whilst another experiences nothing but continuous bad luck.

One way of lowering the financial consequences of misfortune is to protect yourself and your loved ones with insurance. Whilst insurance cannot relieve the physical pain of loss it can assist enormously in reducing further emotional trauma associated with additional financial pressures arising from a premature death, long term illness or permanent disablement.

Over the past twenty years I have dealt with a number of widows who whilst they still suffer emotional loss through the premature death of their husbands have been able to manage solely due to life insurance. They have been able to maintain their lifestyle in a dignified manner and not had to downscale, go back to work, cut short a child's education or sell assets in order to live.

Similarly I have had many clients who have taken out income protection insurance believing that they would probably never claim only to benefit enormously from receiving income protection benefits. The most bizarre case that I can recall was an emergency services officer who called to apologise that he was cancelling his policy as he could no longer afford to pay the premium. On pressing him further he stated that he had used up all of his sick leave, annual leave and long service leave and was about to resign and go onto a welfare payment. I informed him that he had an income protection policy which would provide him with 75% of his income and that he would probably be successful in a claim. I arranged the claim, and the client received benefits for a year then returned to work - a victory for insurance and a reinforcement to me of the value that an insurance program can be to a client and how it can change their lives.

Whilst we cannot live our lives in a cocoon to avoid risk, we should sit down and seriously identify and quantify the financial consequences of a long term illness that may prevent or curtail our earning capacity. Likewise we need to determine what are the consequences of our own or our partners premature death or major health trauma.

As one of the widows I deal with so succinctly expressed - "I know how much he loved me because he battled to pay the premiums so now I do not have to battle without him".

Talk to your insurance adviser and explore some of the "what if's" rather than chancing your families hand in life's lotteries.

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