For income protection, that matters. Traditional insurance conversations often start when someone takes on a mortgage, has children or becomes the household’s main earner. If those milestones arrive later, the decision to protect income can also be pushed back. The risk is that illness, injury or a change in health can happen before cover is in place, making future underwriting harder, more expensive or, in some cases, unavailable.
The underinsurance picture remains stark. FSC research has indicated that income protection ownership is far lower than life or health cover, even though many households would struggle if the main earner could not work for an extended period. This is especially relevant for contractors, sole traders, professionals and families with high fixed costs, where a few missed months of income can quickly affect rent, mortgage payments, childcare, debt repayments and everyday living expenses.
Cost is the obvious barrier, but it is not the only one. Younger workers may be confident managing apps, subscriptions and KiwiSaver settings, yet still misunderstand the limits of ACC or assume cover can be arranged later when it feels more urgent. ACC is valuable, but it does not replace income for many sickness-related absences. That gap is exactly where income protection can become part of a practical financial safety net.
The better approach is not to buy the biggest policy immediately, but to review cover early and build from a realistic starting point. Waiting periods, benefit periods, agreed or indemnity-style cover, occupation definitions and exclusions all affect both price and claim outcomes. Comparing income protection options while healthy and employed gives buyers more control than trying to arrange cover after a diagnosis, burnout episode or reduced work capacity.
This trend also reinforces the value of advice. A good adviser can help younger earners balance affordability against risk, rather than treating insurance as an all-or-nothing purchase. In a market where financial milestones are moving later, income protection should not be left waiting for them.
I waited until a mortgage to look at income protection and ended up with exclusions after a back issue, so the ‘later’ mindset is risky.