Is your car worth more than your family's financial security?

Sunday 21 Oct 12 8:00am
New Zealanders may appear to place greater value on their assets than their lives, household income and their family’s future, the independent chair of the Financial Services Council Dame Jenny Shipley told an Australasian Life Underwriters and Claims Association conference in Auckland today.
“These finding come from recent research undertaken by Nielsen’s research on behalf of the Financial Services Council and will be made public when the FSC releases their comprehensive study into Insurance in New Zealand and our attitudes to it,” Dame Jenny said.

More than 95 percent of homes and cars are insured, but only 57 percent of New Zealanders insure their lives and barely 20 percent have income protection insurance. Sixty percent of New Zealanders were characterised by researchers as finding personal insurance “all too hard”.

Part of the reason is the jargon used by the insurance industry and the complexity of the products on offer, making it hard to understand exactly what is being delivered and value for money, Dame Jenny said.

“Market research indicates there is no hostility to the idea of personal risk insurance. In fact most people understand its value but don’t know how much they need, or feel confident about purchasing it,” she said. “People don’t know where to obtain objective advice.

“One focus group participant spent five hours checking out what was available, before she thought she understood what she needed for her family,” she said.

The Financial Services Council aims to “demystify” the industry by making objective advice available through its website, social media and targeting people at relevant learning moments such as buying a first home or the arrival of a baby.

“The Financial Service Council will over the next month release information on the relative risk of long periods off work following an accident, a major sickness or unemployment. Many New Zealand families are extremely vulnerable if a major breadwinner is unable to work for three months or more,” Dame Jenny said.

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The Financial Services Council (FSC) represents investment and life insurance companies in New Zealand.

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