Owning something valuable, such as a house, car or boat, without insuring it means taking a huge financial risk. For that reason, around 95 per cent of New Zealanders have insurance to protect against loss due to disaster, accident or theft. However, when it comes to protecting themselves and their family’s future, the majority have little or no insurance cover.

Being out of work for an extended period of time because of ill health can be a far greater financial disaster than having a break in or crashing your car. Yet it is worrying that many of us spend more time and effort on protecting our car than our life, family or source of income and that we are still very reliant on family and friends to help us out when the unexpected happens.

New research commissioned by the Financial Services Council (FSC) has revealed many New Zealanders are taking high stakes to gamble on managing financial risk. The majority of New Zealanders have not considered the risk of ‘protecting me’, with just 20% of respondents saying they had considered a risk of lost income due to illness or serious injury.

Over 50% of Kiwis said that they disliked having to think about the impact of financial risk, and when they do think about it, almost half (43%) then forget about them.

Of course, we don't want to talk about premature death or think about being seriously ill. We all like to think we're bullet proof. Unfortunately, life does happen, and things do go wrong. We all need to be prepared by protecting ourselves and our family for when life throws us a curve ball.

We all need to be having honest conversations about improving the way we think about and manage our financial risks. To help, we have put together three rules of thumb:

• Take some time to identify the need to cover you and your family should the worst happen

• The best time to take out insurance is when you are fit and healthy. Once you develop a medical condition, you may be faced with increased premiums or exclusions, just at the very time you are likely to need the cover.

• Life changes, so review your life/health/income protection insurance regularly to make sure you are not under or over insured

If in doubt, ask questions and seek advice from an authorised financial adviser. At Stewart Group, you can book a free, no-obligation chat with our expert advisers to discuss new covers or review your existing insurance covers.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge in the footer of this website.