New research from Integrity Life has revealed that people who opt out of life, income protection, and total permanent disability (TPD) insurance are driving the boom in online crowdfunding websites.
The nationwide poll of 1,000 people showed that those without adequate insurance cover are getting bailed out by Australians in hard times, with 35% of respondents saying they have donated following the death, illness, or accident of someone they may or may not know.
Findings also showed that more than one in five Australians has donated to a fundraising campaign to help others who are left unable to meet financial outgoings after the death of a loved one. A further 24% have donated to help a family member with medical and living costs after a serious accident or illness.
“Crowdfunding has helped so many deserving people at difficult times,” said Chris Powell, Integrity Life’s MD. “That said, we only hear about a very small number of campaigns that do well, and mostly because of the publicity surrounding truly heartbreaking scenarios. However, there are many more people who raise a very small amount. GoFundMe and crowd fundraising websites are not a contingency plan, nor are they a substitute for adequate insurance. They have an important role to play as a last resort for those who are genuinely in need.”
The Integrity Life study found that a mere 38% of Australians felt they had enough life insurance to meet costs of a funeral and ongoing living costs if the primary earner passed away, or medical treatment or other costs if the primary earner suffered a permanent disability or illness rendering them unable to work.
“Our research indicates that there are almost 11.5 million Australian adults who know they do not have enough life insurance in place to help them if the primary earner in their household lost the ability to support their family or worse still, their life,” Powell said. “I expect the real figure would be even higher as people generally underestimate the financial impact of such a devastating event and the long-term effect on their life.”
Hundreds of fundraising platforms have sprung up around the world in the last 10 years – among them is GoFundMe, which is the largest of the social fundraising platforms.