Think HBR

Protecting yourself through life’s five stages


Matt Williams
JSA Group

Disaster-proofing your financial situation is essential to protect those who depend on you. By using life insurance, income protection, trauma insurance and total and permanent disability insurance you can ensure that your financial plan is ‘self-completing’ should you fall sick, get injured, or heaven forbid, die. Everyone’s situation and need for each type of cover will vary. The only way to structure an effective plan is to do a risk analysis to formulate a personalised protection strategy.

Generally speaking, here are the main risk priorities at each of the five main stages of life. (I’ve assumed that people will have a relationship and children but this is not always the case.)

15-24 Youthful Yearnings: We think we’re invincible at this stage but there is merit in parents putting cover in place so that their children have some future insurability secured. The latter half of this stage sees the beginning of responsibilities, such as cars, credit cards and possibly a first home. These commitments bring the need for a protection plan to cover liabilities.

25-34 Mortgage Madness: Relationships and families often occur during this stage. Your income may be growing, but it is increasingly committed to a burgeoning list of expenses. Protection plans are essential to securing an independent way of covering these expenses, if you can’t meet them. This would generally include the full range of life, disability and trauma insurance to cover all contingencies.

35-44 Changes and Choices: Family income is normally starting to peak, especially as the kids start to grow up and you and your partner are working. Retirement and investment planning options may open up, but people often have an even higher level of financial commitments, such as a larger mortgage and the regular expenses that come with a higher standard of living. Risk protection is vitally important for ensuring financial independence if disaster strikes.

45-55 Finally Free: The expense of children may now be tapering off but there will still be substantial commitments to be serviced, such as your mortgage. You may see an increased level of risk through emerging health issues. This makes it essential to maintain comprehensive cover, even though there may be some scope to reduce cover levels.

60+ Rest and Recreation: With the mortgage hopefully paid off and the children independent, your commitments may be diminishing. Partial and then full retirement will occur and investment income will gradually replace earned income. Fewer responsibilities need blanket protection but there’s still a need for some levels of cover to fund family bequests and avoid passing financial burdens on to the kids.

Matthew Williams Matt Williams

An Adviser with JSA Group specialising in financial planning advice on personal life insurance, business insurance and succession planning, superannuation, investment, and cash flow advice. He has a Bachelor of Commerce and an Advanced Diploma in Financial Services (Financial Planning). He is a Director of the Hunter Young Professionals (formerly Newcastle & Hunter Junior Chamber). Visit