Personal Risk Insurance (Do we need it or not?) and Immigrants

Personal Risk Insurance (Do we need it or not?)

These are big questions that most of us have to consider, and here are some helpful answers to these and other questions…..

 What actually is personal risk insurance?

Personal risk insurance refers to types of insurance cover that generally relate to a person’s life and health, as opposed to “general“ insurance which is for things like property, vehicle and business risk. It is not paying into a fund that will refund money to us after a period of time, but rather it is paying a small amount (as premium) on a regular basis that will provide a larger amount at any time if a claimable event happens.

 Why do we need personal risk insurance?

Firstly, your unique needs and circumstances must be considered before answering this important question. For example, if we have assets or property (or if we produce income, or anyone else depends on us), we probably should have personal risk insurance in order to limit financial loss if we (or one of us) was to die, suffer a serious illness or be unable to work.

Why now or sooner is the right time?

The premiums for personal risk insurance are calculated based on multiple factors like the applicant’s age, gender, occupation, current health, level of protection and types of covers etc. But the longer we wait, the more likely we’ll get illnesses or injuries that will either make cover costly or unobtainable if we do try to get it at a later age or stage of life. But it is a very important and long-lasting decision that deserves serious thought and careful consideration.

 Why is it important to regularly review our cover?

As we go through life changes (relationship, jobs, housing etc) so our need for cover will change. Regularly reviewing our cover ensures it stays relevant for our needs at different stages of our life. Professional insurance advice will generally cost us nothing and it will give us access to the experience and expertise of an independent person who is obligated by law and by a Code of Professional Conduct to act in our best interests.

 We are mostly all immigrants, who came to New Zealand with hopes of a better livelihood or for better education. And our children and grandchildren who were born here, are often from middle-class income families with two bread-winners, and so the financial impact of a severe illness or death can be devastating. And this can be potentially even more so for families relying on a single income.

 Many individuals migrating to New Zealand are typically young and in good health, as they must undergo a rigorous health screening process. However, as we become immersed in our daily routines—such as studying, working, and managing family responsibilities—we often experience significant stress related to various aspects of life. In the midst of these pressures, we may neglect our health. This raises several important questions: Who will provide bread for my family if I become ill? Who will cover my bills? Who will manage my mortgage payments?

Conclusion

Personal risk insurance is more important than “general” insurance. We all insure our house because there is often a big mortgage owed to a bank or lender and if something happened tomorrow to the house the bank will still chase us to keep repaying their money. And we all insure our car, contents, iPhone etc because we usually don’t have lots of spare cash to buy a new item if it gets stolen or damaged.

• But what about our health? Health insurance can help us to cover medical costs, including emergency treatment, specialist care and expensive medication that isn’t funded by the government.
• And what about our life? Life cover can help our loved ones to cope if we die or become terminally ill, by providing a lump sum to pay off mortgage or spend on living expenses, children, future education etc.
•  And what about our income? Income Protection cover can help to meet our mortgage and living costs if we get a long-term illness or become disabled.

Personal risk insurance provides vital financial support when we or our family needs it most. So, we should always think twice, did I protect my risk?