1 | Life stages affect health
Personal insurance extends beyond life cover to include insurance against disability and severe illness. Either of these can leave one in need of extra funds, while also unable to work, with all the negative financial consequences that follow – so insurance against these possibilities is advisable.
The likelihood of such events occurring changes over the course of a life. During youth, for example, one is more likely to be disabled in an accident than to die of any natural cause. This implies a greater need for disability cover at younger ages to protect against loss of income and other expenses arising out of a disability.
Severe illnesses are also typically associated with life stage, becoming more or less likely at different ages. For example, breast cancer is a threat from early adulthood for women, whereas heart conditions become a bigger threat for men from their fifties.
These changing possibilities should be reflected in one’s personal insurance portfolio.
2 | Life stages affect financial priorities
Different life stages also bring changing financial priorities, which should be considered in assessing your insurance needs.
Many people overlook the influence of their personal balance sheet (ie assets and liabilities) on their insurance needs.
For example, young professionals often have liabilities (car payments, home loans) that exceed their accumulated savings and investments. For them, insurance products should also protect against such large debts following death or disability.
Mortgage protection cover, for example, pays the outstanding amount on a bond in the event of death, protecting your family left behind against the possible loss of a home.
These examples illustrate the need for flexible insurance solutions that adapt over a lifetime, to avoiding chopping and changing products, and reduce the risk of having inappropriate cover at any given time.
3 | Even at the same stage of life, it shouldn’t be one-size-fits-all
While a life stage plays a role in determining one’s insurance needs, two people in a similar stage may nevertheless be in very different circumstances, and therefore have different requirements.
One young family may have one child, whereas another has three or is responsible for supporting several extended family members. Two professionals may have a similar income, but if one has just signed surety on a business loan, he or she may need more coverage as a result. A personalised solution will consider such factors.
Circumstances can change rapidly and unexpectedly, for example with the purchase of a new home, divorce or a health event.
It’s crucial that you constantly update your cover to ensure it stays relevant and fit for purpose.
The big picture
Personalised insurance is not only about the product, but a holistic view of your needs and financial situation. Look for an adaptable product that seamlessly links with other financial products and services – this will enable you to better identify your needs and will effectively fill the gaps.
Always be clear about where you are in life, with an insurer who gets the big picture and can structure your cover accordingly
Want more information?
If you’re an Investec Private Banking client, you have exclusive access to Investec Life. We bring you life insurance that is individually tailored to protect what is most important to you, with flexible insurance solutions as unique as your life. You can apply on Investec Online or speak to your Private Banker.
Visit Investec Life – Life insurance not made for everyone. Made for you.