Many Kiwis insure their homes, cars, and belongings - but when it comes to protecting themselves, there’s a significant gap in cover. While most homeowners and car owners have insurance, far fewer have cover in place for illness, injury, or loss of income. In this blog, we’ll explore why Kiwis are underinsured and what that means for their financial security.
When the Financial Service Council (FSC) looked into you look into the different types of life insurance available and what percentage of kiwis had cover, the found only:
- 22% reported having trauma/ critical illness insurance,
- 20% reported having income protection insurance,
- 17% reported having total and permanent disability insurance*.
This is a significant when compared to 98% of homeowners having insurance for their home and 95% of car owners having insurance for their car*. So why are Kiwis so underinsured when it comes to protecting their lifestyle?
*You can read more of the report here > https://blog.fsc.org.nz/perception-gap-and-life-insurance
Why are Kiwis underinsured?
The Financial Services Council research suggests Kiwis are underinsured for a few different reasons.
- We don’t like to talk (or think) about hard things like death, injury or what a difficult financial situation would be like.
- We don’t understand the benefits of insurance and don’t know where to get advice.
- Some Kiwis are happy to self-insure or rely on the government.
We get it – thinking about serious illness or injury isn't easy, but facing these tough realities with the right protection and plan in place makes a huge difference. The loss of a life or income from illness or injury is never easy - but wouldn’t it be easier to go through a hard time like that with financial support? Start by asking yourself: What would happen if the unexpected happened? What would be the financial impact? Do you have protection or a plan in place? It’s a small but powerful way to begin considering what cover you need.
Are you underinsured?
You might be underinsured if your life insurance payout wouldn’t be enough to cover your mortgage, debts, or your family’s ongoing expenses if something happened to you. A good way to check is by calculating your financial obligations and comparing them to your current cover. There’s a few ways to do this, but if you’d like a quick, free and easy way to calculate what you should be insured for, check out our digital advice tool.
How digital advice can help
Our online Digital Advice tool makes it easy to understand how much cover you need, based on your personal financial situation. Start by answering a few questions about yourself and your financial situation to see what others like you are covered for, it takes around 10 minutes total. You'll receive three recommendations and can choose the level of cover that suits your lifestyle - whether you want to be insured for the minimum, have enough to pay the bills, or maintain your current lifestyle.
