Over the last few years The Financial Services Council (FSC) has completed two major reports.
The first, ‘The People Insurance Gap’ surveyed 2,000 New Zealand households in 2011 to gain a better understanding of households’ attitudes to the four main personal risk insurances (life, total and permanent disablement, critical illness and disability income). The second, ‘Under Insurance, Income Protection’ gives the results of a survey of 3,234 New Zealanders who are members of Horizon Research’s HorizonPoll panel, representing the adult population at the 2006 census. It covers the impact on households when serious illness means that the primary income earner is unable to work for a period of three months or more.
The Financial Services Council’s research definitely has uncovered some disturbing
information, which for the first time, gives us clear and reliable data about disability and its effect on typical New Zealand families.
Some of the key findings from the research are:
- Over the past five years, one in seven households has experienced a serious illness resulting in an inability to work three months or more.
- Time off work lasting six months or longer is more than twice as likely to be the result of an illness rather than injury. This means for every two people off work and covered by ACC, there are five more off work who are not covered by ACC. Each week, 288 households in New Zealand face the reality of no ACC – little or no financial help, for an unexpected illness.
- The average household needs $652 a week just to cover existing out-going expenses. A couple (with or without children) receive around $341 a week ‘sickness benefit’ (at M tax rate). But this is household income tested. This means a two-income household may get no assistance to help with their cost of living, depending on the income from the spouse that keeps working.
- 55% of households would be unable to pay all their expenses and maintain their lifestyles four weeks after sick leave and annual leave ran out.
Income protection insurance is a must have, not a nice to have!
Call us today to discuss your situation.