NZ Life Insurance Premiums Over Priced

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) March 25, 2011 -- Why Is there a critical level of under insurance among families in New Zealand?

Despite latest statistics showing that total inforce life insurance premiums continue to rise , the Investment Savings and Insurance Association (ISI) says many New Zealanders are still inadequately insured. The latest life insurance statistics (for the year ended 30 September 2010) show total annual inforce life insurance premiums rose 7.1% but too many New Zealanders continue to risk their financial security by failing to protect their greatest asset - themselves.

Unfortunately the reasons why New Zealanders aren't buying adequate levels of life insurance is hard to find. So much so that The ISI plan to undertake a comprehensive study into the insurance patterns of New Zealanders in 2011

A study completed by AMP in November 2005, involving a survey of over 470 parents with dependent children may provide some answers. The survey.showed 67 per cent of New Zealand families have either no life insurance at all or have inadequate cover for their long-term needs.

The main reasons given for Kiwi Families not having adequate levels of life insurance or not having it full stop was "too expensive", "too confusing" or " the insured thought they already had the right level of life cover.

Lets take a closer look at the main 3 reasons given

Too Expensive

Life Insurance premiums in New Zealand by world standards are high. The biggest problem for insurers is their distribution costs through insurance brokers their main source of new business. Commission paid to brokers equivalent to 200% of the first years premium is not uncommon which chews up the first 2 years premiums in up front costs to the insurer and guess who pays.

Too Confusing

There is no doubt sitting around a table with an Insurance Broker can be a daunting experience.It is unrealistic to expect to get all the information you need to make an informed decision in a one hour meeting especially when you are on edge knowing that the Broker is there to sell you something.

Building a relationship with an adviser does take time. Unfortunately in many cases the client is asked to make a decision before the trust factor has been developed and it all becomes too hard and the client ends up doing nothing.The reality is however there are many sites online today which will provide you with information on what is the best cover for you.

"Sorted" New Zealand's free independent money guide, run by the Retirement Commission is one such source and If you are a member of Consumer they also have great content that will enable you to complete your own due diligence.

Right Level of Cover

As mentioned above there is many sites on the internet today which will provide you with information and give you a good indication as to the right level of life insurance. Both Consumer and Get Sorted provide Calculators to assist you in the task of calculating the right level of cover for you depending on your financial circumstances

Conclusion

It is clear a lot of research still needs to be completed to help the industry understand the extent of the under insurance problem and develop products, programs and incentives that wil encourage New Zealanders to better protect themselves, their families and businesses.

However with technology today and the power of the internet the reasons given in the AMP survey for Kiwi Families not having adequate levels of life insurance don't stack up. The reasons "Too Confusing" and "Right Levels of Cover" can easily be overcome with a bit of research on the internet. and once you know how much life insurance you need you can go online and find a supplier who discounts the premium every year to make premiums more affordable.

More information can be found online at http://www.insurance4me.co.nz

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