A recent report suggests New Zealanders are under-insured by hundreds of billions of dollars. Spinoff asks Sharron Botica from AIA New Zealand to explain why it’s so important to make up the shortfall.
“Customer insight work carried out by AIA has told us that people often feel protected against death, illness and other physical circumstances because they feel they can lean on whānau and community to help out. But this isn’t always realistic, and it can be a dangerous mistake that could leave that support network severely and unexpectedly cost-laden.
According to a Financial Services Council NZ report from 2020, 71% of New Zealanders are under-insured when it comes to life insurance.
….. we drastically underestimate how much financial pressure is created when a household loses half of its income.
In 2018, the retirement commissioner Diane Maxwell said the New Zealand “she’ll be right” attitude could be playing a part. That attitude has major consequences and leaves your loved ones to carry a heavy burden.
While relying on savings is a common plan in case of a significant event causing a loss of income – the proverbial “rainy day fund” – you need to have savings to use. Data from Stats NZ showed New Zealanders typically don’t have great savings, with just 0.4% of income being saved over the quarter ending March last year."
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