New FSC research shows Kiwis insure cars, boats and gadgets – but not themselves

The Financial Services Council (FSC)'s latest research uncovers a surprising trend: while New Zealanders are quick to insure their cars, homes, and gadgets, they’re far less likely to protect their health, income, and lives - the very things that matter most.

Titled ‘Money & You: Valuing Belongings Over Ourselves’, the report shows that New Zealanders are twice as likely to have car insurance than life or health insurance.

“The research shows New Zealanders instinctively protect their homes, cars and possessions, but when it comes to insuring their most valuable asset, themselves, there’s a striking disconnect,” said FSC CEO Kirk Hope.

“For those that do have life and health insurance, most Kiwis are paying for it out of their own pockets rather than receiving it through an employer remuneration package,” said Mr Hope.

“With cost being a barrier, expanding access to insurance through workplace schemes would boost uptake and improve coverage across the population.”

“The FSC has identified a required policy shift: exempting employer contributions to life and health insurance from Fringe Benefit Tax (FBT) would remove a key barrier, enabling more New Zealanders to access essential cover through their workplaces.”

“FBT on employer provided group insurance schemes discourages businesses, particularly small and medium-sized enterprises, from including insurance as an employee benefit,” Mr Hope continued.

“There are important policy implications here. Improving access to life and health insurance can enhance workforce resilience, reduce pressure on the public health system, and provide critical financial buffers for families and individuals in times of crisis. This tax effectively penalises employers for supporting the wellbeing of their staff.”

Other key findings from Money & You: Valuing Belongings Over Ourselves’ include:

• Contents, home, and car insurance are more often seen as providing peace of mind than life insurance.

• The majority of New Zealanders pay for life (78%) and health (56%) insurance out of pocket, rather than through employer-provided schemes.

• People who hold insurance generally recognise its value, particularly health insurance, which provides faster access to care, lowers out-of-pocket costs, and supports overall wellbeing, enabling a quicker return to work and daily life.
• 85% of respondents report a moderate to very good understanding of life insurance products.
• 72% of New Zealanders have made an insurance claim, most commonly for car, health/medical, or contents insurance.
• The rising cost of living is the leading reason for cancelling or avoiding insurance, though life and health policies are less likely to be dropped for this reason compared to others.
• When seeking financial advice, more people engage with advisers for mortgages and KiwiSaver than for insurance decisions.

The FSC will continue engaging with Ministers and policy makers on these issues to advocate for evidence-based policy reform. Our efforts aim to improve access to protection, support workforce resilience and promote financial wellbeing through increased access to insurance.

The full report is available here.

ENDS