A lifetime of protection

A lifetime of protection

Did you know that as early as the 3rd and 2nd millennia BC Chinese and Babylonian traders practiced the concept of transferring and distributing risk? People have long recognised the value of insurance and with the types of risk that exist in a monetised society it is imperative that risk is transferred and distributed in a way which will protect a person and their interests throughout the various stages of life.

There are many types of insurance – car, home, health and property to name a few and essentially any risk that can be quantified can potentially be insured. All of these insurances serve a purpose and anyone who is serious about protecting their financial future and livelihood should be covered by and regularly review their insurance cover.

There is a type of insurance that is often overlooked: the life insurance group consisting of death, total and permanent disability (TPD) critical illness and income protection insurance.

The stages of a person’s life can be broken roughly down to four stages:

Stage 1

  • Who are they? These people are starting their careers, beginning to create wealth, they have short-term debt, not many commitments and no dependents.
  • Why do they need insurance? The biggest issue for this group is injury and disablement. Without adequate insurance independence may be lost at a young age and could impact not only them but their parent’s future plans.
  • What insurances do they need? Income protection, critical illness and TPD are a must. Death cover may not be necessary given they have little debt, few commitments and no dependents.


Stage 2

  • Who are they? These people are building their wealth and career. They have longer-term debt in the form of a mortgage and are generally in a long-term relationship or married with children.
  • Why do they need insurance? During this crucial building stage protection strategies must be in order because if something happens which causes the income to stop flowing due to death, sickness or injury the results – both financial and emotional – can de disastrous and the family unit may never recover.
  • What insurances do they need? At this stage death cover, TPD, critical illness, income protection and children’s insurance should be a part of any protection portfolio.


Stage 3

  • Who are they? These people are building and maintaining wealth, they are career-focussed, reducing their mortgage and planning for retirement. Their children are growing up but may still be dependent.
  • Why do they need insurance? Similar to stage 2 wealth is being built and is now being maintained but there is fiduciary commitment with a mortgage and investments as well as education fees for their older but dependent children.
  • What insurances do they need? This group requires the same insurances as stage 2 but may require less cover as they are reducing their debt and may have more cash flow from and for investment.


Stage 4

  • Who are they? These people are maximising their wealth as they are preparing for retirement and financial security is of primary concern. This group typically has lower debt, not as many familial commitments and are focussing on investment growth.
  • Why do they need insurance? This group needs to protect their assets for retirement. If they were to be diagnosed with cancer for example the treatment costs could erode their savings which in turn could potentially mean delaying retirement
  • What insurances do they need? As the primary goal is the protection of savings and retirement death, TPD, critical illness and income protection coverage should be part of their protection portfolio.


This is not an exhaustive interpretation but it is a comprehensive starting point if getting the foundations in place to protect you, your family, your livelihood, your investments and your interests financially and emotionally is of value to you (hint: it should be).

It is important to remember when developing your protection portfolio that insurance is called a safety net for good reason;  its effect can be powerful, life-saving even (take it from our client David), and it alleviates the impact of several factors both emotional and financial, not only the immediate concern for which the claim is made.

If you want to review your insurance or discuss what protection strategy might be appropriate for you please contact us.


Please note this information is general advice only. Please seek advice before acting on any information in this article.

Sacha Loutkovsky
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