Kiwis insure cars and homes, but not themselves

Recent findings from the Financial Services Council (FSC) indicate that New Zealanders are more likely to insure their vehicles, homes, and personal gadgets than their own health, income, or lives.

The FSC’s “Money & You: Valuing Belongings Over Ourselves” report highlighted that car insurance is held at twice the rate of life or health insurance among New Zealanders.

Insurance trends reveal coverage gaps

FSC chief executive Kirk Hope said the data points to a notable difference in how people approach risk.

“The research shows New Zealanders instinctively protect their homes, cars, and possessions, but when it comes to insuring their most valuable asset, themselves, there’s a striking disconnect,” he said.

Out-of-pocket payments dominate life and health insurance

The report also found that most New Zealanders who have life or health insurance pay for it themselves, rather than receiving it as part of an employer remuneration package.

According to the FSC, 78% of life insurance and 56% of health insurance policyholders pay premiums out of pocket.

Hope noted that cost is a significant barrier to wider uptake.

“With cost being a barrier, expanding access to insurance through workplace schemes would boost uptake and improve coverage across the population,” he said.

The FSC has called for a policy shift to exempt employer contributions to life and health insurance from Fringe Benefit Tax (FBT).

Hope said the current tax regime discourages businesses from offering insurance as an employee benefit.

“FBT on employer-provided group insurance schemes discourages businesses, particularly small and medium-sized enterprises, from including insurance as an employee benefit,” he said.

Policy implications and industry recommendations

The FSC report outlined several policy implications. Improving access to life and health insurance could enhance workforce resilience, reduce pressure on the public health system, and provide financial buffers for families and individuals during crises.

The FSC said it plans to continue engaging with policymakers to advocate for reforms that would increase access to protection and support financial wellbeing.

Other findings from the report include:

• Contents, home, and car insurance are more commonly associated with peace of mind than life insurance.
• A majority of New Zealanders have made an insurance claim, most frequently for car, health/medical, or contents insurance.
• The rising cost of living is the leading reason for cancelling or avoiding insurance, although life and health policies are less likely to be dropped for this reason.
• More people seek financial advice for mortgages and KiwiSaver than for insurance decisions.

Health screening trends and medical inflation

Meanwhile, separate reports from health insurer nib New Zealand and professional services firm Aon showed changing dynamics in the healthcare landscape.

According to nib’s February survey of 1,010 adults, 72% of respondents reported keeping up with recommended health screenings, a six-point increase since December 2023.

Participation in eye, dental, cardiovascular, and skin cancer screenings all rose modestly.

However, the proportion of men aged 50 to 70 who had not undergone a prostate exam increased from 60% to 64%.

Cost remains a significant barrier to health checks, with 36% of adults citing affordability concerns, up from 29% in 2023. This issue is particularly pronounced among younger adults.

Aon’s 2025 Global Medical Trend Rates Report found that New Zealand’s medical inflation rate has climbed to 14.5%, up from 7.4% in 2024. This places New Zealand among the highest globally and second in the Asia-Pacific region.