When is personal insurance relevant?

Not everyone needs cover straight away. It depends on where you are in your financial journey.

Personal insurance generally becomes worth considering when there’s something financially significant to protect. This could include financial obligations like personal loans, or future plans that depend on your ability to keep earning.

For many people, this moment arrives when they start working and managing their own expenses – which brings us to the next point.

Your income may already be your biggest asset

At your stage of life, major responsibilities like mortgages or dependants may still feel a long way off. But if you’re starting your career, one thing quickly becomes important: your ability to earn an income.

Your income allows you to pay for everyday life – rent, food, transport and any debt. Over time, it may also support longer-term goals like travelling overseas, buying a home or saving for retirement.

If illness or injury meant you couldn’t work for a period of time, those plans could be put on hold. That’s why many people view income as one of the first things worth protecting.

What types of insurance might be relevant?

Once again, what makes sense depends entirely on your situation. An Insurance Link adviser can help you explore your options and build a solid foundation for your financial future.

Generally speaking, some types of cover young adults consider include:

• Income protection

Income protection can replace part of your income if illness or injury prevents you from working for an extended period of time. Find out more here.

• Health insurance

Health insurance may help you access private treatments options and cover certain medical costs. Find out more here.

• Life insurance

Even without dependants or a mortgage, a small life insurance policy may still be worth considering if you have personal debt or other financial obligations. Ask yourself: who would take care of these if you were no longer around?

The benefits of taking out cover when young

The number-one reason people take out personal insurance is peace of mind. Beyond that, there are also a couple of practical advantages to getting personal insurance earlier in life: 

• Lower cost (all else being equal)

Personal insurance tends to be comparatively more affordable when you’re younger and in good health. Starting early can mean premiums are lower than they might be later in life. 

Of course, premiums will generally increase as you age (unless you opt for level premiums – more on this here). But cost isn’t the only reason some people get cover earlier. 

• Locking in your health status

When you take out a policy while you’re healthy, cover levels are typically based on your health at that time. If medical conditions develop later, they’re often more likely to be covered under your policy (subject to the policy terms, conditions and ongoing premium payments).

On the other hand, if you wait and develop a medical condition before arranging insurance, that condition may be excluded from cover or make obtaining insurance more difficult.

Not quite sure where to start? Get in touch

When it comes to insurance, there isn’t a single answer that works for everyone. What matters most is your personal situation, and there are many factors to consider. 

The good news is that you don’t have to figure it out alone. An Insurance Link adviser can help you understand what options may be available and what type of cover might make sense for your circumstances. 

Remember – it’s about protecting the life you’re starting to build and the plans you’re making. Click here to find an insurance adviser near you. 

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(1) Though definitions may vary, Generation Z (or Gen-Z) is generally defined as those being born between 1997 and 2012 by Pew Research Center and Britannica.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek financial advice. Link Financial Group 2022 Ltd (FSP1004590) holds a licence issued by the Financial Markets Authority to provide financial advice.  

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