FSC launches income protection campaign

FSC chief executive Peter Neilson said it would use videos and case studies to communicate its messages to consumers, to help them understand the benefits of having cover.

The FSC’s polling shows about half of working adults could not survive more than a month after they used up their sick days and annual leave.

But it found most people did not know that if their partner earnt more than $30,000, they would not be eligible for a benefit.

One in five New Zealanders wrongly thought ACC covered all long-term sickness, not just those related to long-term workplace exposures, the FSC said.

It said 60% of New Zealanders thought they had about the same or greater likelihood of being off work for a long period due to an illness as they did of being laid low due to an accident.

But working-age people are almost twice as likely to fall sick as they are to be in an accident.

“The new polling is a bit of a wake-up call and helps partly explain the relatively low take-up of income protection insurance by only 26% of households,” said FSC chief executive Peter Nielson.

“These key facts will be distributed to people who work alongside those living with long-term illness. Health workers, social workers and budget advisers will be able to give good advice based on this evidence.”

Over the last five years only one in eight of the households struck with long-term illness had income protection insurance in place.

Comments from our readers

On 18 November 2015 at 9:11 am Mark Ogden said:

He is quite right when he says "partly explains" it.
Another part is the exclusion of many occupations and industries and the almost blanket exclusion of people with the likes of diabetes etc.
Often the so-called banks "dumber" product(non-underwritten) are the only solution for some people and probably better than nothing.
The carriers need to take some responsibility themselves and have perhaps a tiered offer with limitations like the banks but also cheaper for such individuals.
I shouldn't be all or nothing.
I would suggest the entry barrier for many would be more the insurance companies;
Financials
Occupation
Health
Premiums
and often just ridiculous terms.
With all the noise about "certainty at claim time" it also just precludes the masses.
It's not a criticism, but an observation and just bringing out a cheaper product like Asteron's workability, whilst good, didn't open the offer up to more people apart from perhaps the budget restricted.
Some creativity is really required to really address "the gap" created by the industry itself.

On 18 November 2015 at 12:20 pm Dirty Harry said:

Mark's comments are fair enough. But lets take a double angled attack:

Firstly, products for "the masses". Actually other than health concerns there aren't many who can't buy cover. Nobody has yet figured out how to provide decent income insurance for people who have mental healt, diabetes and other problems and they probably never will. Besides, you're supposed to buy cover before that stuff happens.

As for occupation: Sure there will be miners, police, fire, loggers and long-haul truckies etc but they are only a small percentage of the work force. Dare I suggest sensible use of ACC (CPX where possible), and the bancassurance, VOLO, and CIGNA options for those outside the scope/reach/desire of the mainstream carriers?

The other angle is how many of the 7 out of 8 who become disabled could have purchased cover? I say Most.
That right there is the real problem. These people should be buying cover but are not. They say affordability is a major reason. I say it's proving and understanding the value, so that people are prepared to lift their $ tolerance. That's what advisers and campaigns like Mind the Gap are for. Asteron is doing their bit by introducing a new product that brings the cost down to meet them. Mark seems to significantly understate the importance of that.

On 20 November 2015 at 2:54 pm RS said:

Dirty is right. The key problem is the cradle-to-grave socialist, welfare paradise we've all come to reply on in this country, which precludes even the thought of providing for oneself in this way.

Others think a Give A Little page will save them.

Given a half decent IP plan costs only 2-5% of gross income for the majority, it’s the value not the cost that needs to be articulated.

FSC launches income protection campaign

The Financial Services Council is launching a new website, MindTheGap.co.nz, to promote income protection insurance to New Zealanders.

Wednesday, November 18th 2015, 6:00AM 3 Comments

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