Insurance

ACC misconceptions and lack of insurance put Kiwis at risk

  • New research from New Zealand insurance company Partners Life finds 34% of Kiwis mistakenly believe ACC covers unexplained pain and illness*
  • New Zealand is one of the least insured countries in the OECD, with research showing that only 13% of people have a serious illness while 9% have income insurance
  • The survey also revealed that younger generations are increasingly misinformed about life insurance.

Auckland, New Zealand:
New research published today by New Zealand insurance provider Partners Life finds that Kiwis’ misguided beliefs about what is covered by ACC contribute to an apathetic attitude towards insurance, which puts them at risk at significant risk.

The survey found that 25% of New Zealanders mistakenly believe they are covered for work stoppages due to unexplained back pain, while 24% believe they are covered for work stoppages due to a hernia and 18% think they are covered for lost time due to illness, such as a diagnosis of cancer.

ACC, New Zealand’s no-fault accidental injury compensation scheme, only covers people injured as a result of an accident and will not protect New Zealanders for things like illness or pain unexplained.

The survey results also revealed that only 13% of New Zealanders currently have critical illness insurance, while 9% have income insurance. Getting cover is also not on New Zealanders’ to-do list, with 58% saying they are unlikely to buy life insurance in the future.

The biggest barriers to getting life insurance were cost (54%), believing they’re too young to need it (17%), thinking it won’t be beneficial ( 15 percent), not having assets (13 percent), or having ACC cover them (9 percent).

Partners Life chief executive Naomi Ballantyne says misconceptions about what the ACC covers New Zealanders for are particularly worrying, as people are unaware of the risk they are putting themselves at risk of not not ensuring.

“One of the biggest misconceptions about life insurance is that it’s only something that financially comfortable people should think about. Losing the ability to earn income due to an unexpected health event can put you in financial difficulty, which can be extremely difficult to recover from.

“We hope seeing the gap between what ACC covers and New Zealanders’ understanding of it will lift Kiwis out of apathy and inspire them to take action on life insurance. It is more important than ever to approach our financial future with more foresight and less hindsight by planning ahead. Equipped with the right knowledge, we can work to close the insurance gap in New Zealand,” says Naomi.

The survey also revealed that young New Zealanders are increasingly uninformed about what the ACC covers. Thirty-eight percent of 18-24 year olds think ACC covers them for time off due to a serious illness, such as a diagnosis of cancer. Moreover, more than half (51%) of Kiwis in the same age group think accidents are the main cause of death in New Zealand, when in fact it is cancer.

Kris Ballantyne, Marketing Director of Partners Life, said: “The insurance knowledge gap in New Zealand is widening among the younger generations. The lack of understanding of how insurance works, combined with our indifferent attitude towards it, exposes many Kiwis to many risks of which they are unaware.

“To close our insurance gap and ensure people protect themselves, it’s critical that we educate Kiwis about how insurance works, what the ACC does and does not cover, and make sure they understand. the implications and risks of not having insurance.

“Respondents suggesting they are too young to be covered is also a myth to dispel – insurance matters most when people are not yet financially secure enough to deal with a loss. If you are in your 20s , for example, you have your whole life ahead of you to build financial stability, but you also have the most to lose if an illness limits your earning potential,” concludes Kris.

*A sample of 1,007 New Zealanders was interviewed by research agency Pureprofile in August 2022.

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