The cost of living in New Zealand has reached exceptional levels. Inflation remains high, with annual rates sitting between 5.4% and 6.2% over the past year. Food prices have surged, rent increases continue to outpace wage growth, and household utilities are more expensive than ever. Rising interest rates have added extra pressure on families with mortgages. In fact, the Reserve Bank of New Zealand’s Official Cash Rate (OCR) is at its highest in over a decade, pushing borrowing costs up for many Kiwis.
With all these challenges, it’s no wonder families are feeling the pinch and reevaluating their finances. Many are asking, “Where can we cut back?” But one key question remains: in these difficult times, can you afford not to have life insurance?
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When budgets are stretched, life insurance may feel like an expendable cost, but this is precisely when its importance comes to the forefront. Life insurance is designed to provide financial stability in times of loss or crisis, which is even more critical when personal and national finances are under pressure.
Let’s consider the reality: household debt levels in New Zealand are high, and many families rely on two incomes to cover basic expenses. If the worst were to happen - losing an income due to illness, injury, or even death—could your family cope financially? Without life insurance, your family may face significant financial distress at a time when they need support the most.
It’s not just about the mortgage or rent, but also the day-to-day costs of living. Groceries, utilities, school fees, and other essential expenses won’t stop just because your income does. Life insurance provides a vital financial cushion, ensuring that your family can continue to meet these obligations if you’re no longer around to support them.
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New Zealand is currently experiencing a perfect storm of economic pressures. At the same time, wage growth has not kept pace, meaning Kiwis are effectively earning less in real terms than they were a year ago. Many households are finding that the cost of essentials - like food, fuel, and utilities - continues to rise, leaving less room in the budget for discretionary spending.
In times like these, it can be tempting to cut what might seem like non-essential costs, including life insurance. But when the future feels uncertain, having that financial safety net becomes even more valuable.
In addition to life insurance, Pinnacle Life also offers income protection, which can be a lifeline if you’re unable to work due to illness or injury. In a country like New Zealand, where the public system provides only limited income support, the financial impact of losing your ability to work can be devastating. Without income protection, how long could you maintain your lifestyle if you were suddenly unable to earn?
Income protection ensures that even if you’re unable to work, you’re still able to pay your bills, cover your mortgage or rent, and keep your household running. It gives you the peace of mind to focus on recovery rather than stressing about money.
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It’s important to remember that life insurance and income protection aren’t just about covering the cost of a funeral or a hospital stay - they’re about ensuring your family can maintain the lifestyle you’ve worked so hard to build. New Zealand’s economic conditions may be putting extra pressure on families right now, but the future remains uncertain. A sudden illness, accident, or death could have long-term financial consequences, forcing your family to make difficult decisions about their home, schooling, and even daily necessities.
By keeping life insurance as part of your financial plan, you’re making a smart, long-term investment in your family’s wellbeing. It’s not just about surviving a crisis—it’s about ensuring that your loved ones can thrive even when life throws the unexpected their way.
