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15 Feb 2023

Why insurance is more important than ever right now

With 2023 well and truly underway, many unknowns remain about inflation, interest rates, and the economy.  But one thing is certain: having appropriate insurance is all-the-more important. 

And yet, underinsurance is still a major issue in New Zealand. A research report released by the Financial Services Council in December shows that, while many Kiwis are struggling with rising cost of living, most don’t have adequate financial protection in place. 

Here’s what the FSC has found, and why it’s so crucial to be able to financially protect yourself and your family while also being able to get by.

70% of Kiwis surveyed were underinsured

According to the FSC survey, 70% of the 2,000 respondents were underinsured, shedding a sobering light on Kiwis’ financial preparedness.

Despite a greater uptake of life and health insurance compared to previous years, there’s still a long way to go to having financial resilience. For example, 38% of respondents had life insurance; this means that six in 10 Kiwi households may struggle to cover things like funeral expenses, mortgage repayments and living expenses if the breadwinner suddenly passed away and they had no cover in place. Also, while 36% had health insurance, the remainder are still relying on the public healthcare system.

What’s more, only 14% had total and permanent disability insurance; 18% had trauma (or critical illness) cover; and just 11% had income protection. Which brings us to the next point…

How would you cope if you suddenly lost your income?

When assessing your financial wellbeing, this is a fundamental question: how long would you and your loved ones be able to survive financially without your income? 

As the FSC pointed out, people insure their homes, vehicles and belongings because they can see a tangible and immediate risk if the unexpected happens. However, many don’t seem to assess personal risk the same way – or they underestimate the role that insurance can play in mitigating it.

If you have high levels of debt (like a mortgage) or people depending on you, life insurance is a good place to start. But it’s also important to understand what else you might need. For example, income protection insurance could replace up to 75% of your income if you’re unable to work due to a serious illness or injury. Trauma insurance would provide a lump-sum payment if you were diagnosed with one of the critical health conditions listed in your policy (usually including cancer, strokes and heart attacks). And total and permanent disability insurance would help support your family if the unexpected happened.

The bottom line: insurance is about your loved ones

Being adequately insured is about protecting the ones we love – their lifestyle, their goals, and their aspirations. That’s why it’s so important to consider what would happen if you suddenly were unable to earn a living (or worse), and your family couldn’t access emergency funds. 

Get in touch if you’d like to discuss your needs: we’ll be happy to sit with you and talk through your options.


Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

Link Financial Group Ltd trading as Mortgage Link and Insurance Link FSP 696731 holds a licence issued by the Financial Markets Authority to provide financial advice. Insurance Link (NZ) FSP 446867 is authorised by that licence to provide financial advice. Please visit for more information and Disclosure information.