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Beyond Children – Safeguarding your future

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Another benefit of taking out insurance when you are younger is that insurance policies are generally guaranteed to be renewable. This means once a policy is in place, the insurer is obliged to renew it every year unless you say otherwise. So should your child develop minor health complications or an illness later in life, the insurer cannot refuse cover. Neither can they increase the premiums (called a ‘loading’).

Unfortunately, many adult children delay taking out insurance until they have dependants of their own, or significant financial obligations like a mortgage. Minor health complications can lead to the imposition of a loading or in some instances denial of cover altogether. This is more of a reason to encourage adult children to consider taking out insurance early on.

Case study

 John and Susie were in their early 60s and looking forward to a retirement filled with holidays and the opportunity to pursue their personal interests. They had two children, Fiona, 34, who was married with two children and Ben, aged 28, who was single and still living at home.

Fiona and her husband had already realised the value of personal insurance, however Ben, on the other hand, could not see the point of having insurance. One day Ben was involved in an accident when he dived into a shallow river. He ended up with quadriplegia, needing constant daily care and a home modified to cater for his needs.

John and Susie had worked hard all their lives to ensure they could enjoy their retirement but realised they would now have to dig into their savings to help with Ben’s costs. Had Ben been covered by personal insurance, both parents and child would have had a better chance at achieving financial freedom.

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