New Zealand has relatively low levels of personal insurance cover, by international standards.
Recent research by the Financial Services Council showed that, while 54 per cent of people said it was important to have the right insurance to cover, most didn’t have as much as they thought they probably needed.
A big driver of that is probably our reluctance to think about insurance at all. But if we can identify why that is, we can start to take steps to address our own insurance gaps.
Here are some suggestions…
We don’t like to talk about our finances
The first problem is that many people don’t like to talk about money, full stop. If you’re the type of person who’d rather pretend there’s no such thing, you’re probably even less likely to talk about protecting the money you have.
But even once you get over a general reluctance to think about personal finances, many people still aren’t too keen to take out insurance.
We don’t like to think about the worst-case scenarios
New Zealanders’ reluctance towards insurance could be because it requires us to think about bad things happening. No one likes to imagine getting so sick that they can’t work for a significant period of time, or having a loved one pass away and needing to look after the family.
Insurance requires you not only to think about these possibilities, but to accept that they could happen to you. People tend not to dwell on the bad stuff when talking to friends and acquaintances, so you may not even realise how common these scenarios can be – and how being prepared can be the difference between a quick recovery and a major setback.
We hope it’s a waste of money
This leads into the other main driver getting in the way of openness to insurance – the fact that you kind of hope that you never need it.
In the best-case scenario, you’re signing up to spend money each month on something that you never need to call on to do anything for you. That can be a hard thing to wrap your head around.
But it’s time to flip that on its head
Statistics show that you are 2.6 times more likely to lose income from being off work due to illness than you are to be injured in an accident – and there’s very little in the way of Government support to help you out if you are in that position. It is estimated that 300 New Zealand families each week are put in a position where a long-term illness stops a major earner in the household from working.
Research by the Commission for Financial Capability found that money stress could have a major effect on someone’s life – making them miss out on social activities, not eating right and not accessing adequate health services. So if we talk about insurance premiums as an investment to avoid sleepless nights, it starts to sound a lot more appealing.
Having a sound insurance plan is about providing for your family if you were not around, or minimising the financial impact of a serious illness on your day-to-day life…
Contact us today
If it’s time to think some more about the insurance that you might need, get in touch today. We are here to help you make sure your future is protected.
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.