What Your Young Adults Typically Miss

Being in the financial services industry, I naturally assume all my clients have income protection and risk insurance – because to me it just makes sense.

When starting this article my intention was to encourage you to have conversations with your adult children about protecting their income at an early age – before ‘life’ simply happens to them.

Then with the research I found that it’s not just the younger generation, but a staggering 69% of Australians do not have income protection.

So my intention is still the same – educate your adult children on how to protect their most valuable asset – their income. However, if this also applies to you, then take action!

In our line of work we see lots of things. Mostly great, however life is full of surprises and not all of them are pleasant.

Injuries and illnesses can strike when you least expect them. They often create a financial storm in the midst of life's challenges. This is when income protection insurance steps in, offering a ray of hope in the face of adversity. It's a proactive measure that can significantly reduce the stress and anxiety that accompanies the inability to work during difficult times.

Yet, it's disheartening to note that many Australians still hesitate to embrace the security of income protection insurance. While a substantial 83% of us recognise the importance of insuring our vehicles with car insurance (something relatively easy to replace), a mere 31% have taken the necessary steps to safeguard their most valuable asset – their income.

Safeguarding your income

For many, the thought of safeguarding their income at a young and healthy age may not seem like a priority and an unnecessary expenditure. However, it's crucial to understand the importance of obtaining income protection while they're fit and free from ailments that could potentially limit their coverage in the future.

The age dilemma

The question of when to invest in income protection is often debated. To shed light on this matter, let's delve into some eye-opening statistics.

On average, most people consider income protection around their late 30s or early 40s. However, by that time, they may have missed the golden opportunity to secure the best possible coverage.

According to recent data, only a meagre 10% of young adults in their 20s invest in income protection. The majority wait until they're well into their 30s or 40s. This delay can have significant consequences. Young adults often underestimate the potential risks and health issues they face as they become older and the financial havoc they can wreak without this insurance.

THE CASE FOR EARLY INCOME PROTECTION

Lower premiums

One of the most compelling reasons to invest in income protection at a younger age is the cost. Premiums are considerably lower for young, healthy individuals. As you grow older, the likelihood of health issues and other factors that could impact your insurability increases, resulting in higher premiums.

No pre-existing condition worries

Obtaining income protection early provides an opportunity to secure coverage before you experience health conditions. This is crucial because once health issues arise, insurers tend to exclude pre-existing issues from coverage later on or charge much higher premiums. This can make your premiums an expensive proposition.

Long term security

Income protection isn't just about protecting your present. It's about securing your ongoing financial position in the event you are unable to work. By investing young, you can maintain cover for a more extended period. This is essential as accidents and illnesses can strike at any time. Having long term coverage can be a financial lifesaver.

Now, let's take a closer look at the statistics related to people who do not have income protection. The numbers tell a compelling story.

Financial vulnerability

A shocking 60% of Australians between the ages of 30 and 65 do not have income protection. This leaves them in a vulnerable position with no safety net to catch them if they can't work due to illness or injury.

Strained savings

Without income protection, many individuals must rely solely on their savings if they can't work for an extended period. This often results in depleting their hard-earned savings and pushes them into a financial abyss.

Family impact

The consequences of not having income protection ripple through families. It's not just the individual who suffers but their loved ones too. Without a steady income, financial stress can strain relationships and lead to emotional distress.

When do you need income protection?

You might wonder when exactly income protection becomes a necessity. The truth is, it's a crucial safety net for anyone who relies on their income, but there are specific life situations where its importance is magnified.

In the journey of life, unexpected twists and turns are inevitable. Income protection is not just about protecting your earnings, it's about safeguarding your dreams, your family, and your peace of mind.

The statistics are clear – early investment offers lower premiums; no pre-existing condition worries and long-term security.

It's a compelling choice, a financial lifeline that ensures your future is as secure as your present. Don't just hope for the best – prepare for it.

DON'T WAIT UNTIL IT'S TOO LATE

Tell your adult kids to start thinking about income protection today when they’re young, fit, and healthy.

And if you don’t have it, then reach out today for a discussion on how we can help you obtain it.

If you'd like help with assessing your personal and financial situation, as well as comparing the loans in the market to see if you're truly getting the right deal for you, then call Bob Malpass now on 0431 862 136, email [email protected]

Thanks for reading

Bob

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