Smoothing the Road

My rule of thumb is to self-insure where you can afford to, insure for the knocks you can’t take, allow for the risks you can’t insure, and invest the rest. Insurance helps smooth the road. We have known expenses (housing, food, transport, utilities, taxes). We have big ticket unusual events we choose (weddings, holidays, renovations, cars, bigger houses), and big-ticket unusual events that choose us (sickness, redundancy, disability, death, divorce). You want to get ahead of these events by building up Capital rather than behind them by building up debt. When I started work, I took out Disability Insurance, Severe Illness Cover, and Future Cover. If I couldn’t work, I still needed to earn. If I got very ill, I didn’t have the Capital to absorb that pain. Future Cover allowed me to get further insurance with limited underwriting (health checks) should my needs change. I chose a Finance-STEM job so that I more than covered my expenses and then built up Capital till I felt I was in the sufficiently privileged position that I could self-insure. Endurance and Resilience aren’t the point. But they provide the foundation for the point. Creativity.