When we plan for the future, we usually focus on the things we want to happen. The goals we want to achieve, and the successes we want to tick off. We’re less likely to spend time dwelling on the many what-ifs in life that can derail our plans.
Insurance is a key tool that New Zealanders can use to remain on the right financial path, no matter what happens – but studies repeatedly show many people are underinsured and exposed. So, what can you do to ensure you are financially resilient and adequately protected?
The problem
The Financial Services Council tracks the underinsurance issue with its Financial Resilience Index. In 2022, they found that just under 30% of people surveyed thought they could only last for a month or less if they stopped earning an income.
What’s more, 40% did not know if they could come up with $5,000 within a week in an emergency, and 45% said they would have to turn to friends or family – or were not sure how they would manage – if they were unemployed or unable to work for more than three months.
Only 14% said they had strategies in place with cover such as income protection insurance.
How to avoid it
Having an appropriate level of personal insurance cover can help you reduce your exposure to your most likely risks. Depending on your needs, some types of cover are more suitable than others. And there are a few ways to ensure you have enough cover, now and over time.
Here are some key steps to get you started:
- Have a plan
Having a sound financial plan can go a long way to helping boost your resilience. That may include an emergency savings account alongside a solid personal risks insurance strategy, to ensure that you can cope with whatever life throws at you.
- Work with an adviser
An insurance adviser like us will work with you to understand your needs and goals, and will show you how to craft a safety net to financially protect what’s most important to you. We’re here to give you an objective view and help you to explore all the options that are available. Since different types of insurance are designed to protect you against different risks, having a professional walk you through the details can be really valuable.
- Review your cover regularly
Insurance isn’t a “set and forget” financial solution. Once you have your policies in place, it’s important to review them annually and when anything significant happens in your life. Again, we can help you to understand what may need to change as you go.
We’re in your corner
It’s our job to make sure that you have an appropriate personal insurance plan in place, and help you boost your financial resilience. If it’s time for a check-up, or you’d like to explore your options further, give us a call today.
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.
