Kiwis underinsured despite valuing life and health insurance

1 min read
December 9, 2024

The Financial Services Council (FSC) has released its latest Money & You research, revealing that the cost-of-living crisis is impacting New Zealanders choice to protect their health and life through insurance.

Kirk Hope, Chief Executive Officer of the FSC said, “New Zealand continues to grapple with an underinsurance challenge, with 41% of respondents saying they hold life insurance and 39% health insurance.” 

“Despite this low uptake, over 90% of those that have life and health insurance believe their policies offer good value for money." 

The research report, Money & You: Managing Risk Through Challenging Times, highlighted that a significant knowledge gap persists among New Zealanders around financial risk management.  

Findings include:  

  • Nearly half (45%) admit to a poor understanding of the relationship between risk and return, while many remain unprepared for the financial impact of losing the household’s primary income. 
  • While over 70% of New Zealanders understand the limitations of insurance, such as the effect of age and illness on premiums and cover, they highlight peace of mind and concerns about potential financial consequences as the leading motivations for taking out policies. 
  • Most life and health insurance are funded personally by individuals, with the smaller remainder either fully or partially subsidised by employers. 

Hope continued, “Despite green shoots in the economy, the cost-of-living crisis is still affecting decisions around life and health insurance, with affordability proving to be a barrier for many.”  

"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.” 

“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.” 

“FSC's policy positions aim to deliver meaningful outcomes, enabling more New Zealanders to experience the financial security and peace of mind that life and health insurance provide. This, in turn, will grow greater financial confidence and improve overall wellbeing," concluded Hope. 

Access the report here.

ENDS

 

For all media enquiries, please contact:   

Kirk Hope
Chief Executive Officer
Financial Services Council
098021532 or kirk.hope@fsc.org.nz