Why easier access to advice matters when choosing life insurance

The discussion followed the FMA’s access-to-advice work, which found that only a minority of New Zealanders had used financial advice in the previous year. While that research covered advice broadly, the message is highly relevant for life insurance buyers. Life cover is rarely a one-size-fits-all product. The right policy can depend on debt, dependants, income, health, business ownership, existing employer benefits and long-term affordability.

For families and self-employed New Zealanders, the most useful takeaway is that good advice does not always need to mean a lengthy, complex process. The FMA’s comments point to a growing expectation that advice should be proportionate to the customer’s needs. In life insurance terms, that could mean a clearer conversation about what risk you are trying to cover, what level of premium is sustainable, and whether term life, trauma, income protection or a mix of benefits best fits your circumstances.

This is also an extension of the broader conduct theme already playing out across the sector. Regulators are not only focused on poor behaviour after things go wrong; they are also encouraging the industry to make advice more useful before customers make major decisions. That matters because confusion can lead people to delay taking cover, cancel policies without understanding the consequences, or choose a cheaper option that leaves important gaps.

Technology may help by making fact-finding, reminders and document preparation faster. However, life insurance still involves human judgement. A digital tool can estimate needs, but a person may be better placed to challenge assumptions, explain exclusions, discuss medical underwriting and weigh affordability against the financial security of dependants.

For consumers, the practical step is to treat advice as part of the value equation, not an optional extra. When you compare cover options, look beyond the headline premium and ask how the recommendation was reached, what has been left out, and how the policy might perform if your income, mortgage or family situation changes.

It is also worth preparing before speaking with licensed advisers. List your debts, dependants, income needs, existing cover and budget range. The clearer your starting point, the easier it is to receive focused advice that protects what matters without adding unnecessary cost.