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Blog | What do you have to lose?

Marcus English
Private Client Adviser - Risk & Insurance
8 Oct 2019

I’m using today’s insights to look into a trend I’ve noticed that is the complete opposite to what I had in my own mind. The trend; how differently clients of varying ages seem to perceive value in insurance.

Typically and in theory, I find a person’s insurance needs are at their highest earlier in their adult lives. This is a time in life when they may have a lot of debt, kids to consider, supporting a family and potentially their entire working lives ahead of them.

In comparison, when adults are nearing retirement and have accumulated savings over their lifetime, their need for insurance is potentially minimal. If they had kids, they’re likely to be now adults, or just about, the mortgage is paid off and they have retirement to look forward to. If they suffered an unfortunate life event, it is probable that they have the financial means to cope with it more than if it happened much earlier in life.

But interestingly, lately, I’ve noticed that many individuals and couples nearing retirement seem to value insurance much more. Retirement, or financial freedom, is something they have worked hard for, for so long, and they are close to achieving it. They can see it within their grasp and it’s almost like they don’t want something to get in the way and ruin it just before it happens. It makes perfect sense that they place such value in it, they want to protect their position.

Yet on the other end of the scale, many ‘younger’ adults don’t see the same value. I get it, we don’t really like paying for insurances, but it surprises me that the perceived value seems to be lower among those who need it the most. Perhaps it’s because they are yet to earn all that income and accumulate all those savings. They don’t necessarily see what they have to lose, because it doesn’t exist or hasn’t occurred yet, but they are the ones that potentially have the most to lose.

Everything they want to achieve financially between now and their future goals relies on them staying healthy, continuing to work and improving their earning capacity over time. Why aren’t they protecting the position they are working towards, assuming they get through life without any major speed bumps? I can assure you most won’t question insuring their car, their home, their contents, but what about the millions (potentially) that they haven’t earnt yet? Or the family they are supporting and kids they’re trying to raise? Why do so many not see the value in protecting that position? If you would like to understand this a little more I’m here to help you protect your life and wealth; now and for the future.

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.