Podcast episode

The Risk Property Investors Rarely Plan For: Protecting the Wealth You're Building

6 Aug 2026With Arjun Paliwal & Jack Fouracre

About this episode

Most people building a property portfolio can explain why they're doing it. Better schools, more choice, financial freedom, a legacy for their family. What far fewer people can explain is what happens to that plan if they suddenly can't work.

It's an uncomfortable question to sit with, which is probably why so many investors avoid it. But the mechanism that actually derails a wealth-building journey isn't usually a bad property decision. It's an unexpected disruption to income, at exactly the point when cash flow and debt matter most.

A conversation between Arjun Paliwal and Chris Seneviratne, Director of Wealth Protection at Solace Life, looks at why personal insurance deserves the same deliberate attention property investors already give to yields, equity and diversification, and why so many people only think about it after something has already gone wrong.

What Happened

The conversation opens by unpacking what people actually mean when they say they're "building wealth for their family," tracing that motivation back to its deeper roots rather than its surface-level goals like buying a home or growing a portfolio. From there, it turns to the common misconceptions Australians hold about what would happen financially if they became seriously ill or unable to work, including the assumption that superannuation or government support would be enough.

A significant part of the discussion centres on timing: when people typically start thinking about protection, why cover tends to get cheaper the earlier it's arranged, and the real cost of delaying it until after health issues or life changes have already occurred. Arjun shares a personal account of a lapsed policy that, upon reapplication, led to the diagnosis of a serious heart condition, and a separate case involving a client's family history of bowel cancer that shaped how her cover was ultimately structured.

The conversation closes by connecting personal insurance directly to property investing, arguing that a forced sale during weak market sentiment can cost an investor far more than a insurance premium ever would, and that protection should be treated as a cost of doing business rather than an afterthought.

Key Takeaways

The Real Reason People Say They're "Doing This for Their Family"

When people describe their wealth-building goals, they often talk about tangible things, a home, a property portfolio, a share portfolio. According to the discussion, repeatedly asking what that goal actually means tends to surface a deeper motivation: love, provision, and legacy. The tangible asset is the vehicle, not the reason.

Common Misconceptions About What Happens if You Can't Work

Many people assume they're covered by default, whether through limited insurance inside their superannuation, an expectation that government support will fill the gap, or an assumption that family will step in if needed. The discussion notes that superannuation cover is often minimal, and that changes to government policy in recent times make relying on public support an increasingly uncertain plan.

The "Suddenly Responsible" Moment Most People Wait For

Rather than proactively arranging cover, many people only engage with protection at specific life triggers, described in the discussion as becoming "suddenly responsible." These moments typically cluster around getting married, buying a home, or having children, generally somewhere between the late 20s and 40s. The gap identified in the conversation isn't awareness of these life events, but a lack of earlier education about protection before those events occur.

Why Cover Is Cheaper and More Accessible When You're Younger and Healthier

Insurers generally assess applications based on health at the time of application, not ongoing changes afterward. According to the discussion, arranging cover earlier in life, while healthy and without emerging conditions, often means a simpler application process and can lock in terms that remain in place even if health changes later. Waiting until later in life can mean more extensive medical checks, higher premiums, or policy exclusions.

A Lapsed Policy That Led to an Unexpected Diagnosis

Arjun shares his own experience of arranging cover early in life with minimal underwriting, then later transferring to a self-managed super fund without carrying that cover across, causing it to lapse. When he reapplied years later, the more thorough medical checks required at that stage led to the diagnosis of a heart condition that required open-heart surgery, an outcome he attributes directly to the delayed reapplication process.

Using Proactive Health Habits to Negotiate Better Terms

A separate case discussed involved a client with a family history linked to bowel cancer risk, an area insurers can be cautious about covering due to genetic factors. Because she had a documented history of regular screening and specialist engagement, it was possible to negotiate coverage for that condition rather than have it excluded outright, at a modest additional monthly cost.

Why a Forced Sale During Weak Market Sentiment Is a Real Portfolio Risk

The discussion connects income disruption directly to portfolio risk: without income, cash flow and debt servicing lose their continuity, which can force a sale at a time and price outside the investor's control. It notes that estimated equity based on bank valuations can differ significantly from what a property actually sells for in a low-sentiment market, potentially reducing proceeds by hundreds of thousands of dollars or more on a larger portfolio.

The Four Core Types of Personal Insurance

The discussion outlines four main categories of cover: life insurance, total and permanent disability insurance, income protection, and trauma or critical illness cover. The first three are often partially available through superannuation, while trauma and critical illness cover generally isn't, despite being a commonly claimed policy type. Critical illness cover is distinct in that it pays out on diagnosis of a condition, regardless of whether the person can still work, with proceeds usable at the policyholder's discretion for costs such as non-PBS-listed medication.

Why Insurance Deserves a Different Mindset Than Car or Home Cover

A recurring point in the discussion is that personal insurance shouldn't be evaluated with the same cost-minimising mindset applied to car or home insurance. Affordability still matters, and the discussion notes that cover isn't recommended where premiums aren't sustainable for a given client, but the framing suggested is one of protecting an irreplaceable asset, rather than simply finding the cheapest available option.

Actionable Lessons for Investors

Review personal insurance cover at the same life stages you review your property strategy, rather than waiting for a health event to prompt it.
If you've changed super funds or consolidated accounts, confirm whether existing insurance cover was carried across, since it can lapse without notice.
Consider arranging or reviewing cover earlier rather than later, since underwriting requirements and premiums can become more complex as health circumstances change over time.
Understand what your superannuation cover does and doesn't include, particularly around trauma or critical illness cover, which is typically not available inside super.
Factor forced-sale risk into your portfolio planning; a loss of income can compress the timing and price of a sale in ways that estimated equity doesn't reflect.
Treat personal insurance as a cost of running your property portfolio like a business, rather than a discretionary expense to minimise.

Property investing is built around managing risk, whether that's diversification across states, buffers for cashflow, or careful yield selection. Personal insurance sits in that same category, even though it's often the last piece investors get around to addressing. The cost of arranging it early is generally modest; the cost of not having it, particularly if income is disrupted at the wrong moment, can undo years of disciplined portfolio building. For investors serious about protecting what they're working toward, reviewing personal cover is as relevant a task as reviewing a loan structure or a market forecast.

If you'd like to speak with Chris about your options, then click here to book a free cover check.

Disclaimer

This article is general information only and does not constitute financial, legal or tax advice. Investors should seek advice relevant to their circumstances.

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Transcript

Read the full transcript

This transcript was generated automatically and may contain small errors.

If you have to sell, you're selling at a point that's not in your control. And so do you want to sell at that point or do you want to have choice and options? And that's what protection does, because the mechanism that kills wealth building or pauses it along the journey is cash flow and debt. The information provided in this podcast is general in nature and does not take into account your personal objectives, financial situation or needs. Before acting on any information, you should consider whether it is appropriate for your circumstances and obtain the relevant product disclosure statement and target market determination.

Please review our financial services guide and privacy policy for further information by reviewing our website, solacealife. com. au. Nerd alert! Property nerds, the home for data-driven property investors, where we uncover Australia's hot and cold markets, latest headlines and trends.

Most people listening to this podcast are building wealth because they want to create better choices for their family. Better schools, financial freedom, experiences, or maybe even a legacy. But today isn't about how to build wealth. It's about making sure that the people that you're building it all for are actually protected if life doesn't go to plan. Today I'm joined by Chris Seneviratne, the founder of Solace Life, a dear friend of mine and someone who I've partnered up with on the journey to protecting wealth building so families can get to their end goal with peace of mind.

And so Chris, welcome to the show, my friend. Thanks, Arj. Thanks for having me. Really nice to be here. Mate, in your experience, I just want to talk about people say a lot when they're building wealth, I want to do this for my family, right?

Like I'm doing this for my family. Like what do you think people mean when they actually say that? Like what do you think the meaning is behind that? Yeah, interesting question, Arj. I mean, look, I've worked across the financial industry for many, many years and at one time I was actually a financial planner.

And the question actually that I came up with was to actually ask people the whys about themselves. And the question was always, what does money mean to you? So I'd ask this question and I'd wait for a response. And you continue to ask the question. So for example, a person would say, oh, what's money mean to you?

It means purchasing a home. So what does a home mean to you? And so you continue on with this line of questioning until you got to really the intrinsic reason why people were buying a home. And that was anything from, I love my family, I want to provide for them, I want to give them a home, I want to leave them a legacy. So quite often we talk about the tangibles, the physicality of a property or it could be a share portfolio, et cetera, et cetera.

But the real reason is a very deep-seated one. And asking that question often gets you the real answers to why people are doing what they're doing. Yeah, so that's almost like that's the byproduct, that's the tool. But the real underneath it is what that meaning of family is. And that's so well said.

Now, when it comes to the misconception, right, that Australians have about what would happen financially if they became seriously ill or couldn't work, what do you think some of the biggest misconceptions are that they go, hey, look, this could happen financially if I'm seriously ill or can't work? Where do people get that assumptions wrong when it comes to that? I think people have a couple of different ways of thinking about it. The first one is, oh, I've got some insurance in my super, that should be enough. It could be, oh, the government's going to take care of me and my family if I'm sick or I pass away and I'm no longer here.

It could be, oh, I'll rely upon my parents or my friends or my sister and my brother to support my family during that particular time period. But the reality is that most people's super has very limited cover. And quite often people don't understand that as they go on the journey of life, they take on additional risks at different times. And some people get it and it might come to a point where they go, oh, look, I need to do something about to address those risks. But there are other people that don't.

And you'll see, unfortunately, people that are not insured, there are pretty significant impacts to them financially if something was serious to come up. And when you think about it, like this is the last few months in terms of the government will take care of me, you can throw that out the window. You can just see what's happening in the aspirational taxes, the building wealth taxes and the trying to give life a go in business taxes, just taxes all around. And what, to get you $250 back in a credit in a couple of years from now? That just shows you that the misconceptions are right there.

Like people thinking, like you said, oh, yeah, I mean, the government will have this for me and my super will have that for me. It's so important. Now, at what point do you see when people are actually building wealth that they actually realize, oh, well, I need to protect this? What point of their journey? Look, it's an interesting one.

I suppose being a little bit more active on social media and bringing the message across to people has definitely got people engaging and bringing conversations to me and we're having conversations through that method. Without that method, I sort of feel that people do pick things up at a time in life that I'm going to call suddenly responsible. And that can happen at any time, but generally it comprises of a few different things. It could be getting married, could be purchasing a home, it could be having children, or it could be getting together and people cohabiting and things of that nature. So that is the suddenly responsible time period.

I see it anywhere from late 20s, early 30s into their 40s. And people then go, oh, hang on a minute, we've got a debt, so we've got a responsibility to pay it. We're in a shared space, we've got responsibility to each other for people in relationships. Or we're planning, we're doing some planning for children or we already have children, we also have a responsibility to ensure that they're looked after, their education's provided for, their cost of living is provided for if something goes wrong. So in my mind, those are kind of the areas where they think about it.

I think though what is missing a little bit is the education piece, which as I mentioned, we're trying to address through podcasts and other mediums to provide that to the public. But also then how do we now identify it for ourselves, because everybody's a little bit different, and then what's the solution to it? And so there are definitely ways to address that for people. Yeah, I think what you've just touched on is just there's all these different life events that come up that people make this decision on marriage, debt, everything. And I'm just looking back at my life, I'm just so fortunate to have worked in the bank as one of my earlier careers, because we were constantly educated.

So I was one of those few that at 18 and 19, I was learning about the importance of this. Now, when you're talking to people of a younger age, they often go, well, I'm good, I'll be fine, I'm healthy, I'm fit. And they go also have greater risk parameters. They often are looking for that career shift more aggressively at that point. They're often traveling all over the world at that point, which has a few mischievous or few activities come up when you're traveling, a few adventure things, the adrenaline junkies at that age are more common.

And then what ends up happening as well is that they tend to take a little bit more risk as well in investing where they can, because the family dynamic in some of these pictures haven't come up. But at the same time, what people don't recognize is that earlier on in life, some of those protection mechanisms, because it's so positive early on in life, can also be cheaper, right? How does that work for people who think about delaying their protection until much later in life and delaying their cover to protect them as they're building wealth because of that whole, she'll be right mindset and I'll get to it when I get to it and wait until I have all those debts, wait until I have all the kids and family to think about. What are some of the issues with doing that? Look, I think you're dead right.

And I think that it's interesting to see a lot of people are changing their views on what that might look like. And the example I try and give to people, and again, this is something that I would love to change the psyche for people, particularly as they're building families and they're providing them with legacies as time goes on. I don't know about you, Arj, but I remember when I bought my first car, right? My father said to me, don't you drive that car until it is insured. Do not drive it because if you hit a bloke driving a Porsche, you're going to be paying it for the rest of your life.

And being a car guy, I'm 18, I'm now fantasizing about those days, but nobody ever said to me, hey, Chris, you know what? You've actually started a job. You need to think about protecting yourself if something does happen, if you get sick, if you get seriously unwell, unfortunately, if you pass away, there's always that chance at any point in your life, you need to do something about that. And so I think people should be starting to think about that early on. And the reason I say that is because if you think about it, your ability to earn an income is at the greatest point when you begin your career.

Now, you might not be on those big And that's why we're here chatting today, because I want people who are property investors, who are building wealth for their family, there's a reason, there's a why behind it. Make sure you don't get lost in life admin and don't reach out and just think that you can handle it all alone. Now, Chris, you mentioned a story on the bowel cancer part. That's touching. Just like seeing someone in their late 20s, like you're so much life ahead of you, have that happen to you.

And we're in a world today where there's more processed food than ever. There's more issues that are happening in the modern world as well with how much life has shifted, the products, the chemicals, everything, right? I guess the main thing here is when it comes to the story like that, what was going through the mind of that person? And was that a big motivator for them to then get coverage or then know their options? And what options are available to someone like that?

Not the person who had that, but the person, that family that now wants to consider it. What are they now looking to protect themselves for? I mean, look, this is such a brilliant story. I mean, this particular lady came to me and that was one of her concerns, right? Her and her husband, they were based in Newcastle.

They were actually investing in property. They had built out a property they were selling it. So they were kind of property flippers. They were on the PAYG bandwagon. They had two young kids.

And the important thing to this lady was, yeah, look, I realize this happened. So we wanted hubby and me to get insured. And so, of course, we went through the motions and went through cover, et cetera, which is brilliant. But the interesting thing with this lady is because of that family history, she was actually being proactive about her health. She was getting regular colonoscopies.

She had a specialist she was talking to. So she was on it, right? And what you'll find, again, the little interesting things in health is people that are diagnosed with things like breast cancers and bowel cancers, et cetera, under the age of 40, they could be or there's likely to be a familial link. So things like a common thing called the BRCA gene can mean that you are susceptible to certain cancers. Angelina Jolie, that's the reason why she had a double mastectomy and she had a hysterectomy.

So being proactive about her health in this scenario for this lady was important. So we were able to get her all cover. Normally, what you will find is that with that familial link, insurers are a little bit shy to cover something that there is an obvious family connection to from an illness perspective. So what we did, though, is I went back to that insurance company and I brought the argument and said, well, look, this lady actually has a history of looking after herself. She has her bowel screening.

She has a specialist. She's in tune with herself. So what that meant was instead of getting bowel cancer excluded, we were able to negotiate terms and we brought them back to this client and we said, you've got two options. You can either exclude bowel cancer in your insurance policy or you can include it and you're going to pay a little bit more for that privilege. And I'm not talking about thousands of dollars more, maybe $30, $40, $50 a month more.

And she took that option and now she's got that sleep of mind, peace of night. If that ever happens to her, she's covered. And so is her family and her two little kids. Wow, what a story. I mean, that just shows a couple of things there.

It shows the power of having the right person on your team. You played that role to not just process the policy, but challenge the notion, right? Have that discussion alongside supporting that processing and helping that person. Number two is the importance of taking care of the routine and the checks for someone because you can use your good habits in your favor. And that's exactly what happened here.

Hey, I've got the good habits. I'm not just sitting back and chucking my name in the hat to then go, yeah, take care of me for this. Those links that you picked up, the habits are there. Let's go and use this in our favor and discussion. And then lastly, just people being proactive and thinking about, hey, reaching out.

Because when they reach out and they realize that, hey, I want to actually review my cover and options, the unfortunate part, it's usually sprung upon them from an unfortunate story. But the fortunate part is they're taking action, not just sitting back, right? Now, how do people reach out to you and your team, Chris, just to make sure that if they're listening to this and going, hey, I'm building wealth on my journey. Maybe you're an investigative client listening to this and you're like, hey, I've been buying properties. I'm acquiring debt.

I'm going through life stages. I don't want to leave it till I've sorted all those things. I want to get them early on in my journey so I'm protected early on to let my wealth building journey be for my family and be there for that legacy. How do people reach out? Just, I mean, check out the socials, Solace Life, Facebook, Insta.

Also, if you go to our website, solacelife. com. au, there's a little click here link. You can just book in a meeting with me. Of course, there's no obligation.

More than happy to have a chat and give you guys some information on that too. So feel free to reach out in that way. Yeah. Now, Chris, you also get people try and make claims, right? And this is because they've had something happen to them.

What type of cover, though, do people usually overlook? But it ends up being the one that's claimed quite often. What do you see? Yeah, look, I think the biggest one is a policy called trauma insurance or critical illness cover. So if you take one step back, you've got four policies.

You've got life insurance if you die. You've got total and permanent disability insurance where you're totally and permanently disabled. You've got income protection, which to me is like sick leave beyond what your employer would pay you for. Those are the most commonly known and understood covers because some people may have some level of it in their super fund. Trauma and critical illness cannot be owned in your super fund, and therefore it's often a type of cover that people might have heard about but don't often have.

And the interesting thing about it, unlike the others where, for instance, with, let's say, income protection, you need to have an illness or something's happened to you that's preventing you from doing your job. That's when the benefit gets paid out. The interesting thing with critical illness cover is that it's paid on the diagnosis of a condition. So it doesn't matter whether you can front up to work. It doesn't matter if you can take your kids to school.

It's paid out, and the money can be used at your discretion. So it can be used for covering medical costs. It could be covering things like medication. A lot of people don't know that if you're on a cancer drug and it's not on the PBS, that can cost you $4,000 to $5,000 a month. So imagine someone's, you've got cancer.

It's obviously a very emotive time. Imagine now you've got some money to give you the best chance of surviving that for you, for your family, to get the best treatment that money can buy. I mean, that is such an important policy, and it's one that a lot of people don't realize. And the other little thing is that you can also insure your kids. So if something, you know, God forbid, something happens to your child, the family could get a lump sum of money, and that money then could be used for mom and dad to take time off work to support their child, to be there for the other children, to get the best specialist care that's available that money can buy.

And then on top of that, you've got the lifestyle element too, in case you're like, hey, I had this extra funds come through. And some people get some pretty sickening diagnoses, and they say, you only got X months. Now, what happens? Do you want to just sit back and, okay, what do I do here? Maybe you want to go out and go, I just want to live life a little, because I don't know what could happen here.

I want to have a certain positive attitude towards it. I want to go and do things I might not have done. And you've seen those stories where people received a claim, a payout, and it was substantial, right? I mean, what sort of numbers? I mean, obviously, each person will get their own viewpoints of what they cover themselves for, but what sort of range of coverage do people get for that specific type of cover that's often looked?

Is it a couple hundred thousand? Is it hundreds of thousands? Is it higher, lower from that trauma, critical illness? What is the most common coverage range out there that people often get? Look, it's quite variable.

Normally, with things like critical illness cover, TPD or total and permanent disability cover, you can get from $50,000 to $3 million, okay? Critical illness, you can get from $50,000 to $1 million, so it's not as great. But things I would encourage people to think about is the what-if situations. Now, you can have a look at the research yourself. You can Google it.

You can chat GPT it and to see what are the common ailments that people claim on. Obviously, what we see, it's cancer, it's heart attack. That's really where it's at. The figures then that are selected are obviously based on cost as well.

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