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Is insurance something Gen Y should consider?

Marcus English
Private Client Adviser - Risk & Insurance
7 Jun 2018

Let’s imagine. You’ve reached retirement, you’ve worked hard to build the future you desire. The children have flown the coup, they are now young adults and making their own way in life. They’re no longer financially dependent on you – but what if they were to suffer a disability?

How does that impact your retirement?

You’d support them – of course you would, you probably wouldn’t think twice about it. But that potentially leaves you with much less financial freedom to live your retirement dream.

And this is why we are seeing parents take out insurance policies for their adult children. In many cases even paying for the first year or two of premiums (for someone in their 20’s, in the early stages of their careers, the cost of income protection is very low).

But that’s not even my focus today – the beauty of this is the bigger picture

Too often kids go through school, perhaps university, and end up in the workforce without a sufficient understanding of how to manage their personal finances. Their eyes light up at the banks’ offer to increase their credit limit and thoughts around income protection insurancce are often non existent.

Most people in their 20s and 30s don’t understand the benefits of personal insurances and how insurance protects their long term plans.  Even fewer people recognise the benefit of taking out insurance at an early age; that it often results in significant savings in premiums down the track.

Recently we held our Wealth Creation and Protection Forum, where existing clients were encouraged to invite their adult children. We’ve now assisted a number of our clients’ adult children in finding the best personal insurance products for their needs. But more importantly, we have the next generation thinking about these important issues more thoroughly.

So back to my point earlier, where we’ve seen quite a few retirees start to organise insurance for their children. Not only does it help protect their retirement position but it starts an important conversation and gets their children engaged in taking charge of their financial future.

The conversation might start with insurance needs but that is not the end of it. Next, they are asking about other issues such as extra mortgage repayments, budgeting strategies, compounding interest, etc. All strategies that will help them get off to a good start in their adult lives.

I see this as an excellent opportunity for all of us. Let’s work together to help engage the next generation and ensure they get off to a great start!

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.