Do You Still Need Insurance if You're Financially Well Off?

As people build wealth, the question naturally shifts from “what cover should I get?” to “do I still need this at all?” The honest answer is: it depends. Once you have enough assets to absorb a financial shock yourself, some insurance becomes less essential — but a few risks are large enough that even well-off households often choose to keep cover.

What does it mean to “self-insure”?

Self-insuring simply means carrying a risk yourself rather than paying an insurer to carry it. If you have enough liquid assets to cover an event without derailing your plans, you may not need cover for it. The important word is liquid — wealth tied up in a business, a home, or investments you would not want to sell at short notice is not always available when you need it most.

Which cover do wealthy households often keep?

Even financially comfortable people frequently keep cover for the largest, least predictable risks. Health insurance is one, because the cost and timing of private treatment are hard to plan for. Life cover can still matter where there is significant debt, a business, or a desire to pass on wealth cleanly. The common thread is events big enough that even a strong balance sheet would rather not absorb them.

Which cover might you scale back?

Cover for smaller, manageable costs is often the first thing to revisit as your assets grow, because those are the events you can comfortably meet yourself. Some people also reduce life or income cover as their mortgage clears and their savings build, since the financial gap the cover was protecting has shrunk. The point is to match what you pay for to the risks you cannot easily carry.

How do tax, debt and structure change the picture?

Wealth is rarely as simple as a single bank balance. Business debt, personal guarantees, trusts, and how your assets are owned can all affect what would actually happen to your family or business in a worst case. Those structures sometimes create obligations that outlive you, which is exactly where cover can still play a role even when there are plenty of assets overall.

When is the right time to review?

A good rule of thumb is to review your cover whenever your wealth or commitments change meaningfully — a business sale, paying off the mortgage, an inheritance, or a change in family circumstances. The aim is not to cancel everything as soon as you can afford to, but to make deliberate choices about which risks to keep insuring and which you are comfortable carrying yourself.

If you would like an objective look at which cover still earns its place in your situation, you are welcome to get in touch.

The information in this article is general information only and is not intended as financial, medical, health, tax or other advice. It does not take into account any individual’s personal situation or needs. You should consider obtaining professional advice from a financial adviser and/or tax specialist in relation to your own circumstances and before acting on this information.