It’s natural not wanting to think about life’s “what ifs” — illness, injury, or even the loss of a loved one. But these events can happen to anyone, at any time. Without the right protection in place, households often face extra financial strain at the very time they need support the most.
Being uninsured, or underinsured, can mean having to dip into savings, rely on extended family, or make difficult lifestyle changes. While these solutions can help in the short term, they’re likely not sustainable over the long run. That’s where personal insurance comes in.
Different covers, different protections
Each type of personal insurance is designed to ease a specific kind of financial pressure:
- Life insurance: provides a lump sum if you pass away, helping your family cover living costs or repay debts. Some policies also include terminal illness benefits.
Income protection: replaces a portion of your regular income if illness or injury prevents you from working. Key details to be aware of are waiting periods, benefit periods, and how your income is defined. - Trauma cover: pays out a lump sum if you experience a serious medical event, such as cancer, stroke, or heart attack. The specific conditions covered can vary between insurers, so be sure to check your policy wording.
- Mortgage protection: helps cover home loan repayments if you can’t earn your income due to illness or injury. This may be structured in different ways, so it’s worth clarifying how much of your loan repayments are covered, and for how long.
- Health insurance: contributes to the cost of treatment and may give you faster access to care. Different policies may cover specialists, surgery, or day-to-day healthcare to varying degrees.
No single type of cover fits every situation. That’s why many people combine different policies to create a financial safety net for their household. An adviser can help you determine a protection plan that’s personalised to your specific circumstances, goals, and budget.
Why people go without cover
It’s common to hear reasons like “I’ll be fine” or “insurance is too expensive.” Others may assume that savings, KiwiSaver, or employer benefits will always be enough. In reality, unexpected events can quickly use up reserves, especially if income stops but regular expenses like the mortgage, groceries, or power bills keep coming.
The value of advice
The good news is that insurance doesn’t need to be overwhelming or unaffordable. An adviser can work alongside you to:
- Identify the risks most relevant to your situation – everyone’s circumstances are different, whether it’s a young family, a single income household, or someone preparing for retirement. An adviser can help highlight the risks that matter most to you to have financial protection in place for.
- Match cover types to your goals and lifestyle – for example, prioritising mortgage protection while paying down a loan, or focusing on health and trauma cover if family medical history is a concern.
- Balance premiums with practical levels of protection – advisers can show you ways to adjust waiting periods, benefit levels, or policy structures to help your cover fit your budget, without losing the essentials.
- Keep your cover up to date as life changes – milestones like buying a home, having children, or nearing retirement can all shift what financial protection is most important. Regular reviews with an adviser ensure your cover remains fit for purpose.
Insurance is ultimately about peace of mind: knowing that if the unexpected happens, you and your family have support in place. And you don’t have to figure it out alone. As insurance advisers, we’re here to guide you through the options and help you put together a plan that’s tailored to you.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.