New Zealand is one of the most under-insured countries in the developed world.

We are good at covering our ‘stuff’ – but we ignore our most important asset.


Regardless of what you own, and how nice it is; car, house and boat, whatever – chances are none of these are your most valuable asset. The majority of us were never told that our most important asset is actually our ability to earn income in the future.

Think about it. For the rest of your working life, how much money are you going to earn? Will you spend the next 15 years on a $70,000 salary? That’s over $1,000,000. But what’s the plan if something happens that prevents you from working over that period?


Obviously this all depends on your unique circumstances, but for the majority of New Zealanders, we still have a lot of earning to do in the future, and no insurance in place for the unfortunate situation where they can no longer work.


No one tells us about, or explains, these kinds of insurances in a way that is easy to understand. So most Kiwis aren’t insuring this crucial asset.


Read more about how to insure your future earning here.

We have a false sense of security about what ACC covers.

This is a big one. Most of us have heard of someone getting injured, so badly that they can’t work, and they get 80% of their income covered by ACC.


The problem is ACC only covers injuries that are the direct result of an accident. And even if ACC agrees to pay this 80%, there have been cases where the issue was caused by an existing medical condition, rather than the accident itself. For example someone hurts their back, but scans show a pre-existing back condition the person had. ACC may then stop all payments.

If that person had insurance, for example income protection (where the insurance company will pay 75% of your salary until you can go back to work) then financial stress wouldn’t be on their list of worries, and they can concentrate on getting better.

We’re worried that it will cost too much. And we’re wrong.

Your level of insurance should be directly related to how much you can afford to pay in premiums. Depending on your situation, it could cost $10 a week, it could cost $50, but you decide on the level of cover.

Maybe you’ve got a mortgage, maybe you’re saving for a house or just had your first child – all meaning money is tight – no problem. Get the most important insurance in place and set it up to cost you only $20 a week. You might get slightly less of a pay-out in the event of something going wrong, but you will still be fundamentally covered.

If your situation changes and there’s a bit more spare cash, increase your level of insurance cover and up the premiums slightly.

Here is an example of cost:

  • A 25-year-old non-smoking female - $100,000 of life and trauma cover + private medical cover = $18.50 per week.* Not so bad, right?

  • A 35-year-old non-smoking male - $250,000 life and trauma cover + private medical cover =  $25 per week.* That’s reasonable, and provides peace of mind knowing you’re covered.


*Taken as an industry average and is an estimate only. May differ based on individual circumstances such as job, smoking status and health conditions. An illustration will be done by an adviser based on your unique situation.

There’s a voice in our head saying,  “she’ll be right”.

Classic. We probably don’t even need to tell you why this one is a no-no. But this is a really common Kiwi mentality when it comes to risk and we need to break it. The below stats aren’t designed to scare you, but rather to show how often these insurance policies are claimed by the people that are fortunate enough to have it in place.

Of the Kiwis that have...

  • Medical Insurance – they will use their medical insurance an average of four times before turning 65.*1

  • Income Protection – One in five of them will use their income protection. 81.8% of those in the hospital are there due to sickness, not injury.*2 What happens when their incomes stops?

  • Trauma Insurance – the biggest claim will be for cancer – Cancer amounts for almost one third of deaths in NZ*3. Additionally, 2 out of 5 people will suffer a critical illness such as a heart attack or stroke.*4

  • Life insurance – 17% of the women and 23% of the men will die before the age of 65 here in New Zealand.They are leaving behind a lump sum payment to support their family, even when they are no longer here.*5

Using a financial adviser means that you’re much more likely to get the correct insurance (at the correct level) but most importantly, if you need to make a claim, your adviser will go to bat for you, and deal directly with the insurance company to make sure they pay out.

Further, your adviser will touch base every year to see if you need to change your insurance policy so it continues to meet your needs, i.e. get married, have a child, purchase a new home etc.

And remember, you don’t pay a cent for your adviser’s help - they just get paid a fee by the insurance company for setting it all up. Your insurance will cost the same regardless of whether you use an adviser, so it’s a bit of a no-brainer.

Jessica Smee