Life insurance can come in handy at every life stage - find out how it can help at yours
Any New Zealander between the ages of 16 – 70 can apply for life insurance with OneChoice. But there’s a lot more to consider than just your age.
Whether your life comes to an end or you pick up some serious injuries and illnesses along the way, having cover in place can make sure you’re prepared for the things you didn’t see coming. That’s why applying for life insurance can be helpful at almost every stage of life.
Read on to see how life insurance can help at whatever stage of the journey you’re up to. Not bad for some free reading material.
How can life insurance help?
- TPD cover can help you continue living independently after a debilitating injury or illness that prevents you from earning future income.
- Serious illness cover can contribute to the costs associated with the covered conditions.
- Life cover can ensure your personal loans and final expenses won’t be deducted from your estate if you pass away.
- Reduce the financial blow of a death/serious condition while you’re still getting on your feet.
- Serious illness cover can contribute to the costs associated with the covered conditions.
- Payout can go towards your mortgage.
- If your partner is not working or has a significantly lower income, cover can help them avoid financial hardship if you passed away.
- Allows you to plan for your growing family without worrying about the potentially catastrophic impact should you die or be seriously injured.
- Assists your partner to continue to care and provide for children if you passed away.
- Helps your family maintain expected lifestyle if you couldn’t provide for them due to death or a serious condition.
- Money will be available for added expenses as your kids get older.
- Can help you manage any remaining financial risks that come up if you were to die as you transition to retirement.
Life Insurance for single Kiwis – living solo
Around a quarter of all households in New Zealand are occupied by single dwellers.1 Whether you choose to live alone or it’s just how life has turned out, it’s important to plan for how things might change in the future. While being single gives you more control over your life, it also means you can’t rely on someone else to help out if things go wrong due to unplanned hurdles. That’s where life insurance can step in.
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Think of what would happen if you suffered a permanent disability that stopped you from living independently. If you’ve become used to living alone, having life insurance could help you pay for private care or other medical arrangements to help you stay at home, instead of having to move into a care facility. Plus, you won’t need to worry about these expenses hurting your future financial goals. That’s why some life insurance policies come with optional TPD insurance (that’s Total & Permanent Disability). TPD cover gives you a fixed lump-sum payout if you suffer an illness or injury that prevents you from being able to work in any occupation again. You can use this money to pay for treatment, private care, or other medical equipment that helps you stay self-sufficient in your everyday needs.
Money won’t make up for lost health but remember that medical innovations are always getting better at reducing the effects of some conditions. So even if you’re single and don’t have financial dependents, having cover in place can help you put your life back together after a major health hurdle sets you back.
Life Insurance for young duos
Young, hopeful and curious – couples without kids make up over 40% of New Zealand’s population.2 If you’re part of that band, it’s good to think about what the future holds for your relationship and financial situation.
If you’re not planning to have kids, the biggest expense you’ll need to stay on top of as a couple would likely be housing and rent. New Zealand is a stunning place to live but it’s not always an affordable one – the national average for renting a small home (1 –2 bedrooms) is at least $390 a week. If you’re set on city life, the average rent in Auckland is $600 a week and can even go as high as $850.3 You can expect to pay even more for a mortgage so the financial blow of you or your partner passing away would be tough without life insurance. There’s also the possibility of one of you suffering an illness or permanent disability. Dealing with such a big challenge while you’re still young and haven’t accrued much wealth can leave you or your partner in tough times when medical costs start piling up. Life insurance at this stage can help you protect both your current financial plans as well as any plans you might have in the future, like having kids and starting a family of your own.
Life Insurance for the merrily married
Tying the knot is expensive in New Zealand, even without the lavish wedding. Married couples have a lifetime of costs on the cards which usually require two incomes to cover. From buying your first home to building wealth for the future, life insurance can make sure your financial commitments don’t go to waste if life takes a wrong turn for you or your partner.
A wishing well in lieu of wedding gifts can help you start a savings account for your first home, but decades of repayments mean you’ll need to have a steady income for the years ahead. Recent data from REINZ shows the 2019 median house price in New Zealand was $580,000. If you’re looking to settle down in Auckland, you can expect to owe around $820,000 on your mortgage.4 Tough go.
The biggest worry for married couples with a mortgage is the co-dependence in making repayments. If something happens to either you or your partner, your household income will be cut in half which could make it hard to adapt financially. Taking out life insurance can help you prepare for hard times in the future and protect what you’ve worked so hard for up to this point. This is even more important for young couples who haven’t built up enough wealth to deal with big financial setbacks. Taking out life insurance cover early in your marriage will let you confidently plan for the future and reduce the risk of leaving the person you love in hardship.
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Life Insurance for families with children – from one or two to three or more
Kiwi kids are the future of our country so it’s important to make sure they’re provided for. In fact, New Zealand is running short on births with the current rate at its lowest in history.5 The rising cost of living could be to blame but taking out life insurance could reduce the risk of facing financial woes in the future.
The biggest commitment for parents is still the cost of housing. Even if you and your partner already own a home, you may need to move to a bigger place when children come along. That means you’ll be taking on a bigger mortgage on top of paying for the cost of raising kids. It’s important to think about how you or your partner would cope if something happened to either of you. With kids in the picture, your living situation might not be as flexible as it once was. Moving out or selling the house isn’t always an option so having a backup plan in case things go wrong is a smart move to protect your financial freedom. Life insurance can make sure you or your partner can keep providing for the kids if something happens to either of you. Not only with mortgage repayments but also 18 years of raising them.
You’ll also need to think about education and extracurricular activities. Our kids are growing up with more dreams and aspirations than ever. Whether it’s to be the next All Blacks star or just to find a career path that makes them happy, giving your kids a stable platform to make it happen is a top priority for parents. These are the people who will carry on your legacy and everything you stand for so giving them the best shot at doing that is a great reason to look into life insurance for you or your partner – or even both of you - for added security. The cost of life insurance could be a small cost compared to the potential benefit it can bring to your family.
Life Insurance for established families – full house
Established families with older kids might have a little more wealth built up but a financial hit due a sudden death could undo all the hard work you’ve put in over the years. The common trap with established families is having more financial commitments to budget for. From housing, renovations, and even a bigger car to fit more kids into, the bills won’t magically stop rolling in if you or your partner weren’t around anymore. Life insurance can save your loved ones from becoming overwhelmed with years of debts should the worst happen and even protect the lifestyle you want them to enjoy.
Life Insurance for multi-family households
Some households in New Zealand even contain multiple families, which adds another layer of financial obligations.6 More parents in a household means the odds of losing a homemaker or financial provider is higher. For multi-family households, life insurance could be a useful way to get things back on track if a family member passed away. The payout can be used by beneficiaries to make any necessary changes to the living situation in the household, such as if an adult had to stop working to stay home with the kids.
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Life Insurance for older and wiser Kiwis
Times are changing for established elders. The dream of kids moving out and becoming financially independent is taking longer to kick in since the cost of living is so high.7 It’s common for adult children to still require a helping hand from their parents later in life, especially when saving up for their first home or paying off university fees. Passing away could still leave your partner and adult kids with financial troubles as they try to get on their feet, so having cover in place can be a smart way to stave off that risk. After decades of working hard and planning for your family’s future, it makes sense you would want to protect everything you have built – which is where life insurance could help.
Getting life insurance can be expensive when you’re older so it’s a good idea to consider your individual finances as well as any other resources you have. If you’re still worried about a gap in your financial needs as you transition into retirement, life insurance could help with certain unplanned expenses that come your way.
Life Insurance for single parents
The only thing harder than raising kids is raising them alone. Single mums or dads are a growing trend in New Zealand.8 Without a partner to fall back on when life gets rough, it’s up to you to fend for yourself and your kids. You might have a legal guardian lined up for your children in case you pass away but think about what would happen to their financial situation in that case. Being left to suddenly take in a child is a huge (and expensive) pledge which could overwhelm your nominated guardian. New Zealand has foster care initiatives but your children might be more comfortable living with someone they already know like an extended relative. If you have a next of kin or trusted family member you’d like your kids to stay with after you die, life insurance can help make sure they’re ready for the added financial commitment.
The money can go towards making life easier for your kids despite having no parents, as well as general needs like food, education, and even a savings boost to get them on their feet when they’re ready to move out.
You can even consider nominating your kids as beneficiaries on your life insurance policy. Doing this could give them enough money to start their own life or even pay off the mortgage on the house you raised them in – giving them a place where they’ll always feel close to you. Keep in mind that there may be legal restrictions on how children under the age of 18 can access or use your life insurance payout so it’s best to seek legal advice if you’re planning for young children.
Buckle up for the ride
Life is a journey that you can never really plan for. Curveballs can come your way at any stage of the ride, whether you’re new to life or a veteran at it. Life insurance can help you stay one step ahead of the financial hurdles that come up and give you or your family a payout to get things on back on track if things go wrong. You can read more about life insurance or even how much it will cost you to get a better idea of whether or not it’s right for you.
- Households — Stats New Zealand
- Couples without children increasingly common — Stats New Zealand
- Renting a house — New Zealand Immigration
- Residential property data — New Zealand Immigration
- Birth rate down to record low — Stats New Zealand
- Families and households in New Zealand — Stats New Zealand
- Parents waiting longer for an empty nest — Stuff.co.nz
- One parent with children — Stats New Zealand