When it comes to protecting their lives and livelihood from the unexpected, a high number of New Zealanders are underinsured. It’s the key finding of Gambling on Life, the final chapter of a Financial Services Council’s study focused on Kiwis’ attitude to risk.
“Gambling on Life found that, while many New Zealanders are aware of the importance of types of life insurance, this isn’t reflected in adequate levels of cover for themselves,” said Richard Klipin, CEO of the Financial Services Council. Here are some highlights.
Estimated level of underinsurance – by cover type
The study focused on three main types of Life Insurance available in New Zealand, namely life insurance, income protection and critical illness insurance (also known as trauma insurance). The level of underinsurance has been estimated by adding the proportion of the population who did not have these insurance types to those who have them but say their coverage is inadequate.
Critical illness insurance was the one with the highest estimated level of underinsurance (91 per cent), followed by income protection insurance (89 per cent), and life insurance (71 per cent).
“It is important to remember that not all Kiwis need these types of insurance, for example retirees are less likely to need income protection if they no longer work and have paid down their mortgage,” Klipin explained. “For others, the research highlights some of the reasons for underinsurance, which include affordability, priority, trust, self-insurance and complexity.”
Do you still have the right level of cover?
Consider these questions:
- How would you cover your costs if you were to become critically ill and suddenly stopped receiving an income?
- When was the last time you reviewed your cover? And has anything important happened in your life since then?
- How big is your emergency fund?
As insurance advisers, we know how complex and confusing insurance can be, and we are here to help you understand what’s out there, what you may need, and what options are a good fit for your goals and budget.
So please get in touch: we can help make understanding insurance easier, now and over time.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.