Insurance through life
Dec 13, 2019
In NZ, insurance has a role to play in most stages of our lives. What we need when we’re young can be quite different to what’s required as we get older.
Here’s a rough guide of what to think about, and when.
Childhood and teenage years
Most young people have relatively little insurance, primarily because they don’t have much of a financial life to protect. But – for example – many parents take out health insurance for their kids while they are still young and have no medical conditions so that when they’re older and need to transfer the policy to themselves, they are less likely to have health exclusions on their cover.
Usually, the most important insurance concerns at this stage of life relate to insuring your stuff. You’ll likely want contents insurance, which is available even if you’re renting, and cover for your car. If your car isn’t worth much, you might choose to have for third-party cover only, in case you’re in an accident with an expensive vehicle. An increasing number of young people are also taking out health insurance and income protection – getting cover when they’re young and before they’ve had time to amass injuries and health conditions!
In your 30s
When you buy a house, your insurance needs usually increase significantly. You will need house and contents cover; and speaking specifically about house cover, cover that is sufficient to rebuild your house completely should it be destroyed. You will also need to think about what personal insurance policies you need. If you’re part of a couple, you’ll want to set up enough protection so that if you were to die your partner would not be forced to sell the house. That usually means a substantial life insurance policy, which is often relatively inexpensive at this stage of life.
You’ll also need to think about what protection you need against illness that puts you off work for a while. ACC only applies for accidents, not illnesses. Income protection or mortgage and rent policies will pay out an amount each month to help you stay afloat if you aren’t earning. You might also want a trauma policy to provide you a lump sum to defray costs if you are diagnosed with a specified serious illness.
This decade (or your early 40s) can be a good one to think about locking in some level premiums on policies you want to hold long-term. This means the price won’t increase with your age.
In your 40s
You’ll need to keep up your personal insurance cover as you pursue your financial plans – whether that’s investment, building a business or just paying down debt. Being knocked out at this age can be a bit harder to recover from. If you don’t have health insurance already, it’s worth looking at before you enter a life stage where illnesses and ailments might become more common.
In your 50s
If you are amassing investments and paying off debt, you may be able to dial back some of your personal insurances and instead focus that budget on health cover. But if you’re focusing hard on getting sorted and still have some work to do to reach your goals, you’ll need to check you have sufficient income protection cover. Time off paid work in this decade can affect retirement plans significantly.
In your 60s
If all goes to plan you should be debt-free by about now and have enough investments in place that you could survive with your normal income for a while. You may find your health insurance premiums start to rise more sharply. Talk to an insurance adviser to discuss the cover you need, your budget and appropriate options for your needs.
In your 70s and beyond
Apart from health insurance, you’re most likely back to needing insurance primarily for your belongings. You might want to think about helping your kids and grandchildren by using the budget you previously had for insurance to pay for some of theirs.
Life stage counts; as does expert advice
We have assisted countless families at different stages of their lives. You only need to read a couple of our testimonials to the experience that we bring. If you’d like to speak to an insurance adviser then book a free 15-minute consultation now. You won’t regret it.
Please note that the content provided in this article is intended as an overview and as general information only. Please use your discretion and seek advice before making any decisions based on the information provided in this article.