Do ALL people need life, trauma, TPD, or trauma insurance? No. Do MOST people need insurance?

Do ALL people need life, trauma, total and permanent disability (TPD), or income protection insurance?

The answer to that question is no.

The reason you should acquire any of these types of insurance is to ensure the people who depend on you have financial support in the event of something unfortunate happening. 

A number of people are in a position where they can afford to self-insure. This means that they have the means to support their dependents and themselves in the event of such a scenario. Would Bill Gates, for example, need to take out any of these forms of insurance? Of course not. He can afford all of the medical assistance he could possibly want and doesn't need to pay insurance premiums that are necessary for many people to have that peace of mind.

Bill Gates is an extreme example. But there are many people who have accumulated a decent amount of assets and who can genuinely make the assessment that if the worst were to happen, everything would be okay financially.

In fact, that's a worthy financial objective: to be in a position where you can self-insure, so that you don't need to pay insurance premiums anymore. 

(There are nuances, of course. Someone who might need a policy on their life might not need it for personal reasons. But they might be a key person in their business, which might need cover. I've heard of business people who are so closely identified with their business that they have had tens of millions of dollars of cover.)

If we change the question by one word, however, the answer is completely different.

Do MOST people need life, trauma, TPD, or income protection insurance? 

The answer to this question is almost certainly yes. There are many people who have the resources so that they can self-insure. But there are a great deal more people who can't.

And this drives the question... if something were to happen, based on your current situation could you afford to rehabilitate/live/ensure that your dependents are supported? 


Sonnie Bailey

Sonnie is the founder and principal of Fairhaven Wealth.

Before founding Fairhaven Wealth, Sonnie worked in the legal and financial services industries for over a decade.

Sonnie first became involved with financial advice as a specialist financial services lawyer. For many years, he was an “adviser of advisers”, reviewing thousands of advice files prepared by hundreds of financial advisers, and providing feedback in relation to the quality and appropriateness of advice; industry best practice; risk management; and regulatory compliance. He has published work in industry publications and spoken at various financial advice conferences.

Sonnie has also worked with banks, investment management firms, insurers, and derivatives providers.

Sonnie has worked as a private client lawyer, focusing on succession, estate planning and trusts. He ran his own legal firm in Australia before relocating to New Zealand. He has also acted in independent trustee and company director positions.

Sonnie is passionate about helping people achieve their goals and manage the risks to which they are exposed.

He has written extensively on his blog, New Zealand Wealth and Risk, which can be found at

Sonnie is married to his wonderful wife Chrissy, and has two young children, Ben and Anna.