I’m a HUGE advocate for insurance. Most people who are working should have some form of personal insurance. 

But I’m also a huge advocate for self-insuring when you can. And a message I don’t see enough is that your insurance needs should reduce as you get older.


  • As you get older, so do the people who depend on you. Every year is a year closer to your children becoming independent.

One of the reasons you take out insurance is to help your dependents while they depend on you. For example, in the event of your death, the amount you’ll want to leave to support a 1-year-old is more than what you’ll want to leave to support a 15-year-old, because you’ve already covered 14 years of dependence.

  • As you get older, you should be building wealth, putting yourself in a better position to self-insure.

For example, as you build up an emergency fund, you can reduce the waiting period on your income protection policy. Changing the wait period from 4 weeks to 3 months can reduce premiums significantly. If you’ve paid off the mortgage, your life insurance doesn’t need to provide for accommodation for your loved ones, because you’ve already done that.

I want to stress – in no way am I saying that you shouldn’t insure. Most working-age people need insurance. The point I want to make is that while you may still have insurance needs, in most cases they will decrease over time.

This is another reason why it is worth regularly talking with an independent professional adviser about your insurance needs.

(Unlike most insurance advisers, Fairhaven Wealth does not receive commission in relation to insurance advice. As a result, Fairhaven Wealth has no disincentive to advise clients when they are over-insured.)


Sonnie Bailey

Sonnie is an Authorised Financial Adviser (AFA) and former lawyer with experience in the financial services and trustee industries. Sonnie operates Fairhaven Wealth (www.fairhavenwealth.co.nz).