The Financial Services Council (FSC) recently released its findings into New Zealander’s attitudes towards financial risk. Entitled “Gambling on Life”, the study undertook to understand the reasons behind the high levels of underinsurance in New Zealand and the potential risks Kiwis expose themselves to. Read on to find out what the research uncovered.
New Zealanders are underinsured
From inadequate income protection and life insurance to undervalued business asset cover, too many New Zealanders are not covered sufficiently – if at all – for what they would actually need in the event of a claim.
New research commissioned by the Financial Services Council (FSC) and released in January 2020 has uncovered the high number of New Zealanders that are underinsured when it comes to their lives, their incomes or suffering a major illness.
“Gambling on Life” is the third and final part of the FSC’s research in understanding how New Zealanders feel about financial risk. The research determined that while many New Zealanders are aware of the importance of insurance, most are inadequately covered.
The study looked at the three life insurance types that are available to New Zealanders: life insurance, income and mortgage protection, and critical illness insurance. Of the three types, critical illness showed the highest level of underinsurance with around just 9 per cent of Kiwis sufficiently insured.
About 11 per cent of those surveyed had adequate income and mortgage protection insurance, and just 29 per cent had adequate life insurance.
Reasons for underinsurance
The research highlighted some of the reasons Kiwis are underinsured. Affordability, priority, trust, self-insurance and complexity were all cited as reasons for not having adequate insurance.
But the issue isn’t limited to New Zealand alone: around the world many countries show significant insurance gaps and demand on Government support that far outweighs supply.
The FSC has devised five top tips to stay on top of your insurance needs:
1. Consider how you would cover costs if you were to lose your job, became seriously ill or, in the worst case to provide for your family in the case of death.
2. Review your insurance cover regularly – as life changes, so will your insurance needs.
3. Review your debt and savings and try to keep some savings aside for a rainy day.
4. Speak to your provider or a mortgage adviser and get a holistic view of your current and future financial needs.
5. Take action now – don’t leave it until it is too late.
Download the FSC’s research document here. To find out if you have sufficient insurance cover to meet your needs now and into the future, simply complete this form and one of our insurance advisers will get in touch and arrange a time to meet at your convenience.
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