Is self-insurance a good idea?

It can be, depending on your propensity for risk.

If you’re a bit of a gambler, you might be happy to take some chances in life. By all means do so, if you’re willing to fork out when the bills come due. I’m thinking of a young man who had to use his house deposit for private surgery when a back problem was interfering with his ability to work. It happens sometimes.
 

At the other end of the scale, there are those who can’t relax unless they’ve covered every conceivable risk. These people may sleep easy at night but they could also be paying for cover they will never use.

Most of us sit somewhere in the middle. So what’s the best way forward?

I suggest asking yourself, “What’s my Plan B if things go wrong?”

The answer might be, “Move back in with Mum, sell my house, rely on ACC or rely on a sickness benefit.” Explore what those options actually look like in reality. (One option I strongly discourage is the one so many Kiwis seem to rely on – “I’ll launch an appeal on Givealittle.”)

Self-insurance can be an option. There are also insurance policies that could provide a useful backstop. We’re here to talk things through with you.

Would you like to have a chat about risk and how to manage it? Make an appointment.