If you were given just one car for your entire lifetime, would you do everything you could to keep it well-maintained, running smoothly, and protected?
New data released by the Financial Services Council (FSC) reveals that while 98% of homeowners have insured their home, and 95% of car owners have insured their car, only 20% of New Zealanders have insured their income against sickness or disability.
If insurance policies are designed to protect New Zealanders and reduce the impact of financial loss – then why are so many of us living without any protection, and putting greater importance on our cars than we do our own health and family?
The reasons are twofold:
- Many Kiwis don’t like to (or find it easy to) talk about the things that impact our personal or family financial situation, like injury or death.
- Many Kiwis don’t know where to get advice about insurance and premiums, and don’t understand the benefits of insurance and how to manage financial risk.
Below, we’ll explore the benefits of getting cover through AdviceFirst and how income protection insurance evolves through different life stages and major events.
30s: Building Foundations
As individuals in their 30s embark on their professional journeys and start families, securing their income becomes a priority.
This is a life stage marked by significant changes, such as:
- Buying a first home.
- Starting a family.
- Advancing in your career.
Income protection insurance during this stage serves as an essential safety net, providing financial support in the event of unexpected illness or injury that prevents you or your partner from working.
For individuals and couples in their 30s, it’s essential to carefully assess coverage needs based on your financial responsibilities and future goals. By prioritising income protection early on, individuals can lay a solid foundation for their financial security.
40s: Navigating Midlife Challenges
Your 40s generally bring a new set of challenges and responsibilities, from advancing in one’s career to supporting growing children and planning for the future. At this stage, income protection insurance takes on added significance as you strive to maintain your financial obligations while also safeguarding your family’s well-being.
Once you enter your 40s, you should review and potentially update your income protection coverage to align with your current circumstances and evolving needs. This may involve:
- Adjusting the coverage amount to account for increased income
- Reevaluating the duration of benefits
- Considering additional riders or enhancements for comprehensive protection.
By staying proactive about changes in your life and ensuring these are reflected in your policy, you can ensure that your income protection insurance remains relevant and effective throughout this life stage.
50s: Prioritising Long-Term Security
Once you reach your 50s, you’ll often achieve significant milestones such as:
- Paying off mortgages.
- Seeing children off to college.
- Planning for retirement.
However, this stage also brings increased likelihood and awareness of health risks – which is reflected in the need to protect your financial legacy.
Income protection insurance in your 50s serves as a crucial safeguard against unforeseen health issues that suddenly develop, or disabilities that could derail retirement plans and drain your hard-earned savings.
While it’s unfortunate that health risks increase with age, it’s important to prioritise comprehensive coverage that includes options such as trauma cover and life insurance. By maintaining suitable income protection insurance, you can navigate this stage of life with confidence and peace of mind.
60s and Beyond: Securing Retirement
In your 60s and beyond, you’ll begin the transition into retirement and seek to preserve your financial independence and legacy. While income protection insurance may no longer be the primary focus of your protection or policy, it remains relevant for protecting against unexpected health challenges and ensuring a comfortable retirement.
During this stage, you should review your income protection coverage to ensure it aligns with your overall retirement plan.
By making sure you have appropriate cover throughout your lifetime, you can enjoy financial security and peace of mind in your golden years, ensuring your health, wealth, and legacy are protected.
Securing Your Financial Future
Income protection insurance is relevant throughout most of our lives, offering invaluable support and protection should we experience an unfortunate event. Whether you’re starting a career or raising a family, income protection insurance remains a cornerstone of financial planning.
By understanding its importance early on in your life, maximising coverage at different life stages, and staying proactive in managing your policy, you can safeguard your financial future and protect what matters most.
Personal Insurance Questions? AdviceFirst has got you covered
- Our advisers are insurance specialists. They are passionate about helping you find the suitable cover in an easy, no-fuss process.
- Our team can provide insurance comparisons for major insurance companies in NZ, helping you choose a policy that will protect you, your family and your lifestyle.
- All AdviceFirst advisers are paid by salary, not by commission. This means you can be sure we are focused on achieving good outcomes for you.
About Income Protection Insurance
Income Protection Insurance:
- Provides financial stability if you are unable to work due to a serious illness, injury, or disability as defined in the specific policy.
- Can replace a significant portion of your lost income to help with your financial needs while you focus on recovery.
- It is paid as a monthly benefit — just like your salary — and generally covers up to 75% of your pre-tax salary.
If you’d like to review your current insurance plan and ensure it’s still fit for purpose, please get in touch with us to book with one of our expert advisers.
To learn more, call us at 0800 438 238 or email hello@advicefirst.co.nz.
