We have experienced rapidly increasing house prices over the past few years, increasing the value of what for many of us will be our biggest asset. But does this mean we are actually any wealthier and are we making the same smart decisions we made when our properties were worth less?

From speaking to many people, it would appear not.

Although your property is worth more on paper, this only translates into increased wealth when the property is sold and the capital gain is banked. And if, like many you are selling your old home to purchase a newer, bigger, more expensive property in the same market, and increasing your debt - are you actually any wealthier?

Often the perception that we have more wealth or a larger asset base can lead us to take more financial risks. Apart from increased prices, the tight property market also means purchasing decisions can be rushed due to multi-offer situations which means we may not be spending as much time on due diligence. We often don’t make the same rational decisions we did when house values were lower and it is easy to feel ‘bulletproof’ – “it won’t happen to me and if it does I have plenty of assets to live off”.

But the risks remain, and in many cases are bigger due to increased levels of debt and larger loan repayments. How will you pay your loan if you can’t work through accident or illness? Could your partner or dependants clear any debt and remain in your home after your death? Who will pay for the funeral or childcare expenses?

Insurance is one way to deal with these risks and often a very cost effective way. For a regular small premium, you can cover some fairly major risks and provide you and your dependants with peace of mind. Insurance is available to cover the worst case scenario and to reduce the financial impact of a change in your health.

We’re not all bulletproof superheroes and these risks are very real. Talk to us today about protecting those things that matter most to you.