When you think about the things you talk to your friends about, insurance probably isn’t top of the list. It might seem a bit dry, and it’s something that most people hope they’ll never actually need to use, anyway.
But having a conversation or two about insurance from time to time can make a big difference. That doesn’t mean giving them advice or telling them what they may need, but just sharing your experiences and promoting awareness about the importance of insurance. This could potentially highlight areas they haven’t thought about before…
So, here are a few reasons to chat about insurance, and how to go about it.
New Zealanders tend to be underinsured
Overall, New Zealanders have lower levels of insurance than many other countries.
Globally, New Zealand ranks 26th out of 56 for insurance spend, at 3% of gross domestic
product (GDP) compared to an OECD average of 9.4%. A survey by the Financial Services Council found 70% of New Zealanders were underinsured, which was potentially putting them and their families at risk. Only 11% of people told FSC that they had income protection insurance and only 18% had cover for trauma or critical illness. Just over a third had life insurance.
We may not consider our risks
We tend to be better at having insurance for assets such as houses and cars. One Insurance Council survey showed as many as 97% of homeowners have house cover – which could be partly because it’s a requirement for anyone taking out a mortgage. On the other hand, many people don’t appear to have considered that their income and ability to earn could be a more valuable financial asset.
But what would happen if you suddenly lost your ability to earn an income? How would that impact your lifestyle and the path towards your long-term goals? This is something worth discussing with your friends and family, if you have the opportunity for a deep conversation.
Normalising insurance makes a big difference
The more people talk about insurance, the more normal and commonplace it becomes. When topics aren’t as unfamiliar, we are more likely to engage with them.
Talking to friends about the insurance you have, and why, will make it more likely that your friends become familiar with what’s on offer, and consider what might be useful for them.
You don’t need to go into detail about the cover you have, but explaining what you have prioritised can be a useful first step.
You might prompt someone to think again
Knowing someone they trust as a friend understands the value in insurance may prompt your friends to think about what cover might be appropriate for them.
We tend to trust our friends as a source of information in lots of investment decisions – and insurance is likely to be no different.
If you’d like to help your friends to become a little more financially resilient, having an open and honest conversation about how you made the decisions you have about your insurance could be a great first step.
Ready to talk?
Do you have your own questions about your current policies, or about insurance you might like to take out in future? We are here and ready to help. Give us a call or drop us an email and we can help you take stock of your current protection, and any changes that might be needed in the future.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.