Bad things only happen to other people
Despite this and other more commonly recognised serious diseases like cancer, stroke and heart attack, most New Zealanders still think that bad things only happen to other people, and as a result we’re woefully under-prepared.
A Financial Services Council report5 in 2012 found that at least a quarter of Kiwis mistakenly believe that we are more likely to suffer an accident (and get support from ACC) than we are a serious illness.
It’s a mind-set that’s reflected in our attitudes to protecting our incomes.
AMP earlier this year surveyed6 more than 600 people between the ages of 18 - 39, and discovered that we’re pretty casual about the fact that we might not be able to support ourselves if we were suddenly unable to earn an income.
For example, in the case of choosing one or the other option, half of respondents would rather have flights and accommodation for a mystery break (55%) or $1,000 gift card from their favourite store (54%) instead of years’ worth of life and income protection insurance.
Is the benefit the best alternative?
In New Zealand, an accident victim might get about 80 per cent of his or her income paid by ACC, but people who suffer a serious illness will have to apply to WINZ for a Job Seeker’s benefit (previously known as the sickness benefit), and even then they may not qualify - the Job Seeker’s benefit is unlikely to be anywhere near 80 per cent of your salary.
The moral of the story is that we can fall ill at any time from any number of causes and, instead of relying on other people or the Government for our financial security, it is important to take steps to make sure we have adequate income protection or trauma cover to help make us self-reliant.
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1The Financial Services Council (FSC) Income Study 2013
3Social Media for Nurses, page 37, Chapter, Software Applications Supporting Social Media http://amzn.to/2ch2OZL
5The Financial Services Council (FSC) Insurance Gap investigation surveyed 2,000 New Zealand households in 2011
6606 participants completed the AMP Essentials survey. Margin of error+/-4% at the 95% confidence of interval (considered an acceptable margin of error).