Why personal insurances are an important part of the process.
1. This is the biggest financial decision you have made in your life to date!
You have just started the kiwi home ownership dream and put your name on a property. A rewarding and satisfying achievement! However, with debt comes responsibility. Now we need to think about what we would want to happen to the property if we were to suddenly pass away, or how we would cope with the mortgage if we were unable to work. What happens if I get really sick and can’t work? Is leaving my partner the property debt free if I was to pass away something that is important to me?
2. You have increased your outgoings but your income (generally) is the same.
All of these new expenses put additional strain on our finances. Mortgage repayments, home maintenance, house and vehicle insurance, electricity, wheelie bin, wood for your fireplace, internet, the list goes on. The income that we receive is all of a sudden spread a little thinner. What this also means is our reliance on our income is greater than ever before. We are at a point where we are more vulnerable than ever to these new costs and we are put in a position where if our income was to stop due to a significant illness or injury, we could be in a world of trouble.
3. Family support is great, but how long can we lean on mum and dad for?
When we buy our first home, some of us have access to family support, which is a fantastic luxury. This provides some sense of a buffer or insurance in itself. What we need to be aware of and think about is how much financial strain is that going to put on our loved ones and how long will they able to assist us if things were to go wrong?
4. You’re on the ladder, now let’s climb!
Life is meant to be lived, that is what it is all about. Covering ourselves from the unknowns in life means we give ourselves the best shot at getting on track and staying there. In life things happen that are out of our control, it is about putting appropriate tools in place to make sure the road bumps in life don’t become roadblocks.
5. “OK, I need to look at my personal insurance. But who is best to talk to?”
Not all insurance discussions are the same. Make sure that your insurance adviser is one who deals with multiple insurance companies and offers a comprehensive assessment of what your requirements are. This is a very personal and important process and it is vital that you fully understand what you are signing up for. Make sure you see someone who is able to compare companies against each other and is someone that you trust.