When is the best time to take out insurance?

“I’m young and healthy; insurance isn’t a priority in my life yet, right?” Actually, the opposite is true.

One of the most common questions we hear from young Kiwi adults is, “When is the right time to get insurance?” The honest answer: as soon as possible.

The decision to take out insurance is so you can provide financial security for yourself and the people you care about.

At Global Finance, we believe that the right time to get insurance has more to do with the stage of life you’re at and your changing circumstances, rather than just your age. But we also believe that you’re never too young to think about insurance. Acting sooner is better than later.

Your future is created by what you do today

Generally speaking, the younger and healthier you are when you apply for insurance, the more affordable your premiums. As you get older, your risk of claiming on your policy increases, so the premiums are likely to be higher. On top of that, waiting until after a life-changing event, such as an illness or injury, can limit your policy options or affect the terms. By acting sooner rather than later, any medical conditions you may develop later in life will be covered by insurance.

Securing your future

Insurance is about securing your future and protecting the people who rely on you, particularly if you’re at the stage where you might not yet have built up a lot of wealth.

Why get insurance cover?

Insurance serves two purposes: transferring risk and replacing uncertainty with certainty.

• Transferring risk: By paying a small, regular premium, you shift the burden of potential financial losses to an insurer. Whether it’s covering funeral costs, medical expenses, or a car accident, insurance means that the big bills are handled by someone else.

• Living with certainty: Insurance takes away the financial guesswork. Instead of worrying about and saving for ‘what if’ scenarios, you can move forward knowing that if something goes wrong, you and your loved ones will have financial support.

If you think the idea of getting insurance seems like something to deal with in the never-never because “you’ll be right”, you may wish to reconsider.

It’s called the unexpected for a reason

The unexpected can happen at any time. Accidents and serious medical conditions can affect both the young and old alike. They can put your home, business or family at risk. They can put your life on hold. Insurance offers the financial wherewithal so you and your family can move forward.

Key life events that signal it’s time for insurance

While age alone isn’t the deciding factor as to when you should take out insurance, certain life events or milestones highlight how important having insurance can be.

1. Taking on a long-term liability
If you’ve bought a home or investment property with a loan, banks typically mandate insurance to protect their investment. If you pass away, your family can pay off the mortgage and still live in the family home. Insurance can help your family cover the remaining loan if you’re no longer there to contribute.

2. Forming a partnership
Marriage or cohabitation brings shared financial responsibilities. Life insurance ensures your partner is financially supported if something happens to you. Even if you don’t own a home together, joint debts like car loans or credit cards are easier to manage with a policy in place.

3. Having dependent family members
Having children introduces a whole new level of responsibility. If either you or your partner dies or can no longer work, your family could be in dire financial straits. Life insurance ensures their future is protected. It can cover living costs, education expenses, or ongoing medical care.

5. Employment in a risky occupation
Certain jobs come with higher risks. If your work environment increases your chances of injury or illness, having life and health insurance provides essential financial security.

6. Starting a business
Entrepreneurship usually involves loans or personal investments. Business insurance can protect your venture, so your family won’t inherit financial liabilities should the unforeseen happen.

The case for acting now

Ideally, your house would never burn down, your business would never fail, you wouldn’t develop chronic back pain, you would never crash your car and a loved one you depend on financially would never die. But in the sad case that any of those things ever happen, an insurance policy could well save you or your family from a lifetime of debt.

Delaying taking out insurance could mean higher premiums or fewer coverage options. The longer you wait, the greater your chances of developing a health problem that may even be uninsurable.

Taking the next step

If you’re taking on a mortgage, buying a car, starting a family, or going out in business, having the right insurance is an investment in peace of mind. You’ll be better prepared for life’s uncertainties.

At Global Finance, we understand that everyone’s needs differ. Our experienced advisors can help you identify the type and level of insurance that best fits your life stage, goals, and responsibilities.

Contact us today. We can work with you so you can protect yourself from the unexpected. We’ll explore your options to help you protect what matters most to you. We’ll compare the various types of insurances to find the policy that’s right for you and your financial situation and together we can create a plan tailored to your future. To discuss insurance and your possible options, call the team on 09 255 5500 or email us at insurance@globalfinance.co.nz.

The information and articles published are true to the best of the Global Finance Services Ltd knowledge. Since the information provided in this blog is of general nature and is not intended to be personalized financial advice. We encourage you to seek Financial advice which is personalized depending on your needs, goals, and circumstances before making any financial decision. No person or persons who rely directly or indirectly upon information contained in this article may hold Global Financial Services Ltd or its employees liable.