by Jenni McManus
Uninformed and underinsured. That’s how insurer Partners Life describes most New Zealanders in the wake of a survey revealing that 34% of respondents wrongly believe ACC will cover them for unexplained pain and illness.
The survey also shows 25% think ACC will cover them for time off work due to back pain, 24% believe they’ll be covered for a hernia and 18% for illnesses such as cancer.
In fact, ACC covers only accidental injury, meaning it won’t pay out for any sort of illnesses or unexplained pain. And few New Zealanders have the type of private insurance that will cover time off work should they be diagnosed with a serious illness. Only 13% of survey respondents have critical illness cover and 9% have income protection insurance.
Life cover was not top-of-mind for most respondents, either. Fifty-eight percent said they were not likely to buy life cover anytime soon, with the biggest barriers being cost (54%), a belief they were too young to need it (17%), thinking it was of no benefit (15%), not having any assets (13%) and the belief that ACC would pay out (9%).
The survey covered 1,007 people and was done earlier this month.
New Zealand is one of the most underinsured countries in the OECD, says Partners Life managing director, Naomi Ballantyne, and the lack of understanding around the limits of ACC is “particularly worrying”.
The 18-24 age group is the most uninformed, with 38% believing ACC will cover them for time off work due to a critical illness such as cancer. And more than half (51%) think accidents are the leading cause of death in New Zealand (it’s cancer).
“We hope that seeing the discrepancy in what ACC covers and New Zealanders’ understanding of it will jolt Kiwis out of apathy and into action when it comes to life insurance,” Ballantyne say.
“One of the biggest misconceptions when it comes to life insurance is that it is something only financially comfortable people should think about. Losing the ability to earn an income due to an unexpected health event can put you on the back foot financially which can be hugely difficult to recover from.”
Kris Ballantyne, Partner Life chief marketing officer, says many New Zealanders are oblivious to the risks posed by their lack of understanding about how insurance works and their indifferent attitude.
“Respondents suggesting they are too young for cover is also a myth to dispel. Insurance is most important when people are not yet financially secure enough to weather a loss. If you’re in your twenties, 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 restricts your earnings potential,” he said.
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