Personal Insurance Claims Maintain Support for Kiwis
Personal Insurance Claims Maintain Support for New Zealanders
The amount paid out in claims by the personal insurance industry (life and income protection insurance) in the year ending June 2014 was $1,096,617,000 maintaining the support the industry provides to New Zealanders.
FSC Chief Executive Peter Neilson today released the industry statistics for the year to 30 June 2014, noting that claim payments for individual income replacement benefits had increased by 3.6% to $107,325,000 for the year and payments for trauma benefits had increased 2.6% to $134,291,000.
In the same period claims made on the death of policyholders covered by individual term policies fell back by 2.8 % to $410,700,000 while death & disablement, replacement income and trauma claims under group policies increased by a total of almost 1% (0.8%) to $20,416,000.
Payments made on trauma policies are now the largest category of claim by a significant margin. Trauma benefits have been welcomed by policyholders as a way of gaining security and protecting their families in the event that they are diagnosed with a serious ailment, such as stroke, cancer or heart attack.
These policies, also known as critical care benefits (and previously as “dread disease”) pay a benefit upon diagnosis which allows the policyholder to take time out of the workforce during treatment and recovery.
In the 5 years to 30 June 2014 the number of individual trauma benefits in force has increased 43% to 623,629 and annual premium income from trauma benefits has increased 75%, an indication that their value is recognised.
Income replacement policies also remain popular with 530,931 individual benefits in force as at 30 June 2014, an increase of 28% over the past 5 years.
These benefits cover the greatest area of vulnerability for New Zealand families as most New Zealand two income families would be ineligible for a sickness benefit if they were off work for an extended period, because of the family income test. Many New Zealanders don’t realise that they are two times more likely to be unable to work for six months or more following a major health problem compared with being off work for six months following an accident covered by ACC.
The FSC Quarterly statistics are available on the FSC website www.fsc.org.nz .