Navigating the cost of living crisis: Is insurance still necessary?

As budgets tighten, you might wonder if it’s an area where you can cut costs. However, it’s essential to consider any repercussions and possible consequences before cancelling your cover.  

A real life story

A recent, heart wrenching story underscores the importance of insurance. After maintaining her life insurance for a decade, an Auckland mother decided to cancel her policy. Tragically, she was diagnosed with terminal cancer just weeks later. Without the policy, she not only faces her illness but also the added stress of her husband needing to take time off work to care for her and their children. Had she kept her insurance, she would have been eligible for a terminal illness benefit, providing vital financial support during this difficult period.

The decision may be irreversible

Insurance serves as a crucial safety net for unexpected events. Cancelling your policy can mean losing coverage for pre-existing conditions or, worse, being unable to secure new coverage at all. This is particularly true for insurances requiring medical underwriting, such as life, trauma, income protection, and health insurance. Once cancelled, reinstating your policy with the same terms can be challenging, especially if your health status has changed.

Continued financial protection 

One of the primary reasons insurance remains necessary is to prevent additional financial burden on your family if something goes wrong. Policies like income protection and trauma insurance are especially valuable, as they offer financial assistance if you fall ill and cannot work. This support ensures you can meet financial commitments and continue to provide for your loved ones.

What if you’re worried about the cost? 

If the cost of insurance is a concern, it’s wise to consult with your adviser before making any changes. They can help review your policies and current situation, offering advice on the best options for you. There might be ways to adjust your coverage to make it more affordable without sacrificing necessary benefits.

In challenging times, insurance remains a necessary step to protect your family’s financial future. Before making any decisions, speak to your Enva Financial Adviser to ensure you’re making the best choice for you and your loved ones.