Most New Zealanders are underinsured, according to research. But how has that happened – and why aren’t we talking about it?
A health and life insurance expert is urging Kiwis to have more open conversations about their cover amid research showing New Zealand is one of the most underinsured countries in the OECD.
A Financial Services Council survey of more than 2000 Kiwis found around 70% were underinsured, “signalling a significant resilience gap for households and the wider economy”, according to its 2026 State of the Sector report.
Of adults under 29, just 26% hold a life insurance policy; that rises to 45% for 30-39-year-olds but falls to 43% for 40-49-year-olds and continues to drop from there. Just 23% of those 60+ have an insurance policy.
Speaking on NZME lifestyle and wellness podcast We Need to Talk with Toni Street, Partners Life chief distribution officer Andries van Graan said it’s clear New Zealand has “a big problem” with health and life underinsurance.
‘A false sense of security’
Asked where Kiwis’ complacency stems from, van Graan says it’s partly an over-estimation of the support already available.
The Accident Compensation Corporation (ACC) is a system highly effective at delivering the support it’s designed for, but many Kiwis don’t realise that support is limited to those who have suffered injuries, meaning illness and disease aren’t covered.
“It’s really good to have [the ACC], but it creates a false sense of security for a lot of people because they think, ‘You know what? When life happens to me, I’ll be sorted, because the government has my back.’ And I think that is not helping,” he told Street.
Another factor at play is a lack of financial literacy, says van Graan.
“I don’t think we do enough at a young age to teach our kids what it means to insure yourself, what is your ability to earn income, or what it means for you and your family into the future.”
That’s coming with consequences. Van Graan says he’s seen a lot of people who feel regret that they weren’t covered by health or life insurance when something unforeseen cropped up.
“There are so many stories, we just need to look around us,” he said. “Look at the GoFundMe pages out there that fundraise for people that … are really in a difficult financial situation because there’s no insurance, and they’re looking at others to help them.”
A personal story of loss
For van Graan, the conversation about insurance is a deeply personal one.
It’s less than five years since his wife Anna learned she had stage-four colon cancer – a diagnosis that devastated their family.
The disease ultimately took Anna’s life earlier this year, four years and two months on from diagnosis. But the initial prognosis in February 2022 had been much worse – she had been given just three to six months to live if she didn’t get treatment.
“If I go back to that first day in the oncologist’s office, I will never forget that. Everything changed for me right there, because he said, ‘Hey, I see you have insurance’,” van Graan recalls.
“And what he said after that was the penny drop moment for me, after 30-odd years in the industry. He said, ‘You know what? That’s so good. You’re at the best place you can be, because we can now do everything for you.’”
Within 30 days of diagnosis, Anna had undergone her first of 59 rounds of chemotherapy – a treatment van Graan credits with extending her life. He believes the wait for chemo would have been much longer if they had to go through the strained public health system.
“That gave us that additional time and the ability to spend time together,” van Graan told Street.
“We were the fortunate ones that she had the insurance, and therefore we could get in there as soon as we had… I never had to say ‘we can’t do this’ or ‘we can’t do that’. For me, that was a very important piece…
“The insurance gave us access to treatment we would have never been able to afford.”
Having the conversation
Van Graan acknowledges conversations about health and life insurance aren’t easy to have, but says they can begin from the premise that families naturally care deeply about each other, “so let’s sit around the kitchen table and talk about a few things”.
The best place to start, he says, is with our needs and wants, because conversations about them tend to flow easily.
“The needs are simple things like paying the bills – electricity, food, rent, mortgage. And the wants are those things we want to do: the experiences we want in life, the things we want to achieve, our hopes and dreams.”
It’s worth considering what it would mean for the main earner to lose their income, van Graan says, and how that might impact those needs and wants. This is the point that having a conversation with a financial advisor can be valuable.
“You don’t have to know the answer – just turn up… Advisers will sit with you, they will ask you all sorts of questions, because they need to get to know you and your circumstances,” says van Graan.
“They will talk you through scenarios, share stories with you, their experiences. That will help you to realise where the gaps are and put a package together that will sort you out when life happens.”
While the current economic climate has tightened household budgets, van Graan says it’s important to have some cover, whatever that looks like. A licensed professional adviser can help you ensure the cover you choose matches your budget.
“They will help you to start at least with something,” says van Graan. “Because there’s one thing people should know: something is always better than nothing.”
Van Graan’s advice for anyone considering insurance is simple: “Don’t wait for tomorrow… Talk to somebody, because tomorrow might be too late.”
For more information, visit www.partnerslife.co.nz
Listen to the full episode of We Need to Talk with Toni Street here.