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39% of Kiwis worry about the financial consequences of a significant health event
According to FSC latest survey, due to the widening gap between financial confidence and financial literacy, New Zealanders are facing higher levels of risks and unfortunately, we are not adequately protected. In terms of insurance, New Zealanders are significantly underinsured, with one of the lowest levels of insurance in OECD countries. On the other hand, our aging population do not have enough funds for a rainy day or retirement.
The survey reveals the true story that nearly all New Zealanders insure their homes and cars, but they do not insure their life and health and wellbeing. There is 22% gap between financial confidence and the reality of financial literacy in insurance. This may explain the reason for the trend.
New Zealanders should have accessible and affordable healthcare. The private health insurance supports the public sector and can provide quicker access and innovation to services. There is also demand for employer based schemes to support team productivity and manage health risks at work, whether it is through injury or sickness. It’s important that New Zealanders ‘age well’, and as such access to health prevention services have never been more front of mind.
Latest FSC data shows that the New Zealand health insurance industry supports around 1.45m New Zealanders and in the last year paid out around $1.8 billion in claims to support them to meet their healthcare costs. Many health insurance claims relate to elective treatments, such as orthopaedic and gynaecological services, which helps to ease demand on the public health care system. Around a quarter of claims come from customers aged under 45, who claim for a range of services – from day-to-day health care costs such as dentist and GP visits, through to specialist consultations, diagnostic tests, and surgery.
Since 2020 and the Covid-19 pandemic, the industry has continued to grow with more New Zealanders opting to get and retain health cover, a similar trend to those found internationally. Despite this growth, the latest research shows that just 37% of Kiwis invest in health insurance cover.
There are top five reasons for having health insurance:
• for peace of mind
• to reduce stress
• it seems like a financially responsible thing to do
• because I worry about the financial consequences for myself/my family if I died or had a significant health event
• it was recommended to me by a friend.
• Figure 1: What is/are the reason(s) you took out this health insurance cover, Money & You – Delving further into the generational differences, data from 2020 shows that average claim levels for those with health insurance start from newborn and steadily grow to a peak around the age of 60-64, showing that all age groups benefit from health insurance support. • Figure 2: Average claim for age group as percentage of total average claim Health insurance cover protects our families when the unexpected happens and should be a key consideration when thinking about managing the potential loss of income that a significant health event might create in your household. A well balanced and integrated health system is key to achieving and supporting great customer and patient outcomes.
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Patrick Wang
