Wealth Protection with Insurances

Insurance requirements will vary depending on an individual's goals and what stage of life they are in. As we develop relationships and possibly have children our financial commitments increase. These commitments peak early on in our lives when mortgages are first taken on. As our careers stabilise (and incomes too), the size of the mortgage and other debts generally decreases. This is reflected in a lower need for life, disability and critical illness insurance. However, if part of our retirement savings plan includes the accumulation of a geared share and/or property portfolio there may always be a large debt that needs covering (this assumes that the portfolio would not be liquidated to pay the outstanding loan).

Ultimately the level of cover needed to protect against a loss in income, to repay debts or to provide for dependants will depend on each individual's circumstances. There is no 'one size fits all' when it comes to determining levels but a trusted financial planner can assist in that determination. While having a car involved in an accident or stolen may have a slightly higher probability than early death, disability or serious illness, the financial and emotional damage of the latter is something that should not be underestimated.