Getting it covered: Helpful tips for assessing your financial life

December 22, 2021

It’s that time of the year again – time to take a look back and plan ahead. And because 2021 has been nothing like any other year, you may feel the need to start 2022 with renewed financial confidence and peace of mind.

On this note, recent events have shown us all how quickly things can change, and that the unexpected can take unexpected shapes. So if you’d like to secure your financial life, why not take a moment or two to assess where you’re at and identify any insurance gaps you may have?

Here are some tips to get you started, starting with your number-one asset…

Your income

If you were asked to name your most important asset, what would it be? Your house, maybe your car? These are all important assets, but if you think about it, they depend on an even bigger asset: your income.

Your income is what enables you to pay the bills, repay the mortgage and afford your living expenses. How long would your family be able to maintain your lifestyle if you suddenly lost your earning power?

A combination of emergency funds and income protection insurance can help you create resilience. Income protection insurance is designed to provide you with up to 75 per cent of your wage for a fixed period of time, after a waiting period, if you’re unable to work due to illness.

Depending on your situation, you may also consider trauma insurance. This type of cover pays out a lump sum upon diagnosis of certain serious medical conditions, regardless of whether you’re working or not, and you can use the pay-out as you like. Many people, for example, use it to afford some time off work, to focus on their recovery or tick some items off their to-do list.

Your health

As we’ve just seen, the trauma insurance pay-out can be used in many ways, including to pay for ground-breaking medical treatments that may not be publicly funded yet.

But if you’re looking for ways to fast-track your health, then health insurance is also worth considering. Here in New Zealand, we’re lucky enough to rely on our public system for emergency care. However, when it comes to elective (non-life threatening) surgeries and diagnoses, waiting lists can be quite long and frustrating.

Without health insurance, people seeking non-urgent health care (for example, hip replacements or colonoscopies) usually have two choices: wait or ‘go private’ (and pay for the treatment in full, which for some procedures can cost tens of thousands of dollars).

Health insurance can help ease the financial impact of a sudden medical expense, while also providing you with faster, affordable access to private treatments (and in some cases, even cover for certain unfunded medications). Depending on your needs, you can choose to cover surgery, specialist care or even add on GP visits, depending on the modules you select.

Already have health insurance? Remember: it’s important to review your cover over time, to ensure it’s still aligned with your needs. Get in touch if you’d like to discuss any of this further.

Your family’s future

Is your family’s future protected? How long would they ‘survive’ financially if something happened to you? Would they still be able to pay off the mortgage, and keep the family’s home? Would they have to rely on one income for a while, or maybe no income at all?

If you have people depending on you and/or a mortgage, securing your family’s home and lifestyle is crucial – and taking out an appropriate level of life insurance can help you do just that.

On the surface, this type of cover is pretty straightforward; it’s designed to pay out a lump sum should the insured pass away prematurely. The key thing is to insure for a sum that will be sufficient to meet your needs, depending on the level of outstanding debt you have (e.g. the size of your mortgage) and any other future requirements (e.g. your children’s education costs).

Getting it covered: Helpful tips for assessing your financial life

Your income

Your health

Your family’s future

We’re here to help