AIA conducted extensive research in early 2012 into why New Zealanders don’t buy life insurance and other personal insurances. This survey revealed:
- New Zealand has a significant underinsurance challenge with one of the lowest take up rates of life insurance in the OECD.
- Christchurch was the largest insured event nationally and it provided some useful insurance statistics. There were 185 lives lost but only 84 life claims were paid out totalling $16.5m. This was an average of only $196,429 per claim. Is that all people think their life is worth?
- 87% of us have car insurance, 84% contents insurance and 70% have house insurance.
- 50% of us have life insurance (likely to be underinsured), 11% income protection and 12% total permanent disability.
- When asked how much they know about insurance, almost twice as many indicated they knew ‘a lot’ about home contents insurance vs life and other personal risk insurances.
- Similar statistics applied to the level of confidence New Zealanders have in buying various insurances. Only 26% stated they felt ‘very confident’ about buying life insurance vs 51% feeling ‘very confident’ about home contents insurance.
- 20% of respondents felt other insurances were more important than life insurance and 52% felt it was too expensive. This is an interesting statistic as the likelihood of dying before age 65 is greater than the likelihood of your house burning down. Does this mean we accept that disasters can affect our possessions but we believe we are ‘bullet proof and immortal,” and we struggle to face the realities of life?
The team at Milestone is passionate about assisting our clients to achieve their financial goals. For most people, this means there is a need to have various personal insurances to cover the risks of living. Our future income could be many millions (depending upon current age, earning ability and retirement date) so this becomes our largest asset and needs to be insured. Talk to us about how much cover you may need and of what type. It is surprisingly cheap considering the level of risk being covered.