The Financial Services Council (FSC) has released its latest Money & You research, revealing how rising living costs are influencing New Zealanders’ decisions about life and health insurance. With only 41% of respondents holding life insurance and 39% health insurance, the report highlights a growing underinsurance challenge in the country.
FSC Chief Executive Officer Kirk Hope remarked, “Despite this low uptake, over 90% of those that have life and health insurance believe their policies offer good value for money.”
Why insurance is overlooked
The research paints a picture of New Zealanders grappling with tough financial decisions. While many recognise the peace of mind and financial security insurance can provide, affordability remains a barrier. Most policies are funded personally, with only a small proportion fully or partially subsidised by employers.
Hope noted, “The cost-of-living crisis is still affecting decisions around life and health insurance, with affordability proving to be a barrier for many.”
Understanding risk and the role of insurance
The report also reveals a knowledge gap that leaves many unprepared for financial risks. Key findings include:
- Poor understanding of risk and return: Nearly half (45%) of respondents say they struggle to grasp the relationship between financial risk and reward.
- Limited preparation for income loss: Many households remain financially vulnerable if the primary income earner is unable to work.
- Recognising policy limitations: While over 70% understand factors like age and health can impact premiums, most take out insurance for peace of mind and to protect against major financial setbacks.
Closing the gap
Hope highlighted the need for greater financial education and better access to insurance options. “Our FSC Blueprint for Growth outlines our policy aspirations to help Kiwis better understand and manage their risk through insurance, while ensuring accessible and affordable healthcare for all,” he said.
Efforts to make insurance more affordable and encourage employers to offer subsidised policies could significantly improve financial security for more New Zealanders. As Hope concluded, “The findings highlight an urgent need for greater financial education around risk management, alongside efforts to remove barriers that prevent employers from offering insurance as part of employee remuneration packages.”
For those who already have life or health insurance, the benefits are clear: financial confidence, peace of mind, and protection during life’s unexpected challenges. However, for those yet to act, this research underscores the importance of taking steps to manage financial risks effectively.
Need advice?
An adviser can assess your circumstances and goals, to determine a comprehensive protection plan that is tailored to your needs. They’ll also help update your existing policies by identifying any gaps that may have arisen due to life changes such as a change in income or a growing family. To explore your insurance options or review your existing policies, get in touch with your adviser today.
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 developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.