Misconceptions Around ACC And Lack Of Insurance Are Leaving Kiwis At Risk

• New research from New Zealand insurance provider Partners Life reveals a 34 per cent of Kiwis mistakenly believe ACC covers unexplained pain and illness*
• New Zealand is one of the most underinsured countries in the OECD, with research showing just 13 per cent of people have critical illness while 9 per cent have income insurance
• The survey also revealed younger generations are increasingly misinformed when it comes to life insurance

Auckland, New Zealand: New research released today from New Zealand insurance provider, Partners Life, reveals Kiwis’ misinformed beliefs around what is covered by ACC are contributing to an apathetic attitude toward insurance, leaving them at significant risk.

The survey found 25 per cent of New Zealanders mistakenly believe they are covered for time off work due to unexplained back pain, while 24 per cent believe they are covered for time off work due to a hernia, and 18 per cent think they are covered for time off work due to an illness, such as a cancer diagnosis.

ACC, New Zealand’s no-fault accidental injury compensation scheme, only covers those injured as a result of an accident and won’t protect New Zealanders for things like illness or unexplained pain.

The survey findings also revealed just 13 per cent of New Zealanders currently have critical illness insurance, while 9 per cent amount have income insurance. Getting cover is not on New Zealander's to-do list either, with 58 per cent saying they are not likely to get life insurance in the future.

The biggest barriers to obtaining life insurance were cost (54 per cent), a belief that they are too young to need it (17per cent), thinking it will not be of benefit (15 per cent), not having any assets (13 per cent), or that ACC has them covered (9 per cent).

Partners Life Managing Director Naomi Ballantyne says misconceptions around what ACC covers New Zealanders for are particularly worrying as people are not aware of the risk they are causing themselves by not getting insured.

“One of the biggest misconceptions when it comes to life insurance is that it is only something financially comfortable people should think about. Losing the ability to earn an income due to an unexpected health event can put you on the backfoot financially, which can be hugely difficult to recover from.

“We hope that seeing the discrepancy in what ACC covers and New Zealander's understanding of it will jolt Kiwis out of apathy and into action when it comes to life insurance. It’s more important than ever that we approach our financial futures with more foresight and less hindsight by planning ahead. Equipped with the right knowledge, we can work to close the insurance gap in New Zealand,” says Naomi.

The survey also found that younger New Zealanders are increasingly misinformed about what ACC covers. Thirty-eight per cent of 18-24-year-olds believe that ACC has them covered for time off work due to a critical illness, like a cancer diagnosis. What’s more, over half (51 per cent) of Kiwis in the same age bracket believe accidents are the leading cause of death in New Zealand, when in reality it is cancer.

Partners Life Chief Marketing Officer, Kris Ballantyne says, “When it comes to insurance, the knowledge gap in New Zealand widens among younger generations. The lack of understanding around how insurance works combined with our indifferent attitude toward it is leaving many Kiwis at a great deal of risk that they are oblivious to.

“To resolve our insurance gap and ensure people protect themselves, it’s vital that we educate Kiwis on how insurance works, what ACC does and doesn’t cover, and ensure they understand the implication and risk involved of going without insurance.

“Respondents suggesting they are too young for cover is also a myth to dispel – insurance is most important when people are not yet financially secure enough to weather a loss. If you’re in your twenties, for example, you have your whole life ahead of you to build financial stability but you also have the most to lose if an illness restricts your earning potential,” concludes Kris.

*A sample of 1,007 New Zealanders were surveyed by research agency Pureprofile in August 2022.

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