MAS Senior Adviser Dane Boswell knows all too well the terrible consequence of underinsuring your life and income earning potential. 

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When Dane was 20, his mum passed away in an accident on their family property in Kerikeri. Tragically, his parents had cancelled their life insurance just six weeks prior to the accident because they felt they were in a position to manage on their own - they had a successful business and were feeling secure with their income. 

This placed Dane's father under huge financial pressure and meant he had to work until he died in his late 70s. This has made Dane passionate about helping MAS Members make more informed decisions when it comes to protecting themselves and their families, often using his own painful personal experiences as examples of the worst-case scenario. 

"I want to make sure that others don't go through what my family has been through. I've lost both my parents and I'm only in my mid-thirties. My Dad had a really tough last few years of life because no one spoke to him about insurance with enough conviction to ensure my parents had enough cover in place."

"It's definitely a sad position to be in, especially for my kids - they won't get to know my side of the family at all. It really drives home that New Zealanders absolutely need to do away with the 'she'll be right attitude'. It's my job to make sure Members don't end up in the same situation and they are protected in case the worst happens."

Are Kiwis under-insured?

Research commissioned by the Financial Services Council (FSC) has revealed that a lot of Kiwis are underinsuring their lives despite being aware of the importance of life insurance. 

The research shows that only 9% of Kiwis are adequately insured for critical illness. 11% have enough income protection/mortgage repayment insurance and 29% with adequate life insurance. 

Dane believes underinsurance comes down to a combination of being uninformed and an attitude that 'it won't happen to me'.

"People aren't really willing to delve into 'what if' scenarios. A lot of our Members generate a really good income. But some people fail to realise that their ability to earn a good income is their biggest asset and it needs to be adequately protected," he says. 

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Don't set and forget

Dane sees Members making a lot of mistakes that are easily avoided. His advice is to ensure you are keeping your adviser in the loop if your circumstances change, have your policies reviewed frequently and, if you haven't had this sort of insurance before, make the time to have an in-depth conversation with your adviser to understand what the best option is for you.

"The most prevalent mistake I see is people taking out a policy and not reviewing it when their situation changes. I often see policies that have been in place for 10-15 years without anyone looking at it and they are no longer applicable to that person's situation.

"If you get married, divorced, have a child, buy a house, take on other dependents like elderly parents, change job roles or have an increase in income - all those kinds of life events should trigger a review of your life insurance cover and might change the advice an adviser will give. 

"Quite often I see people who have a lot of life cover that may not actually be required - in some situations a better option may be to put some premium into recovery or income security benefits instead," he says. 

More information

If you would like to discuss your income protection insurance, you can book a free appointment with a MAS adviser. They don't receive commissions so you can be sure they have your best interests at heart. 

Find out more here

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