Alex Casey frets about death regularly, has a deep aversion to personal admin and two needy pets. This is her story.
I’m always thinking about my near misses. If it wasn’t for me winning an argument in 2014, my Mum and I would have boarded the doomed flight MH17, instead of leaving 24 hours later. Once, a ladder flew off the van in front of us at 100km/h, bounced in front of the windscreen, and then limply fell to the side as if stopped by something truly divine. Another time, I had to Heimlich manoeuvre myself over a bannister to stop choking while eating a Happy Meal.
Combine these experiences with a childhood defined by endlessly rewatching the Final Destination franchise, and an adulthood defined by generalised anxiety disorder, and you’d be right in thinking that I am fretting about death almost all of the time. Sprinkle all those worries with a cost-of-living crisis and a deep aversion to personal admin, and whether or not I need life insurance is frankly the very last thing I want to be thinking about in 2024.
And yet, here I am with Claire Sutton, asking her every question I could think of about why I should or shouldn’t get life insurance in this economy. Claire is executive manager at Asteron Life and knows everything there is to know about this topic. First of all, an important clarification: no, buying life insurance is not insurance that you will live forever. “We haven’t quite figured that out yet,” she laughs. “But if you know anybody who has figured out eternal life or eternal youth, let me know.”
Unfortunately, Sutton remains firm on my mortality, despite my best attempts to convince her otherwise – “It’s not a question of whether you will or won’t die, it’s just about at what point that happens.” Instead of focusing too much on death, Sutton prefers to see life insurance as one part of a holistic approach to overall financial wellbeing. “It’s really about putting in place some level of protection for people who depend on you, or commitments that you have,” she explains.
It’s also, devastatingly, not about me at all. “Most of the time we see life insurance coming through, it’s for someone else. They are looking after the people that they love,” says Sutton. “If I think of my family and the life insurance I have, I bought it knowing that I will likely never benefit from the cover. I’m doing it for my family, for my kids, my husband.”
But what if, outside of a dog that gets a UTI when I travel for work and a cat that pisses blood when we have visitors, I don’t have any needy dependents? “It’s not always about kids or a partner, I think it’s mostly about lifestyle,” says Sutton, “You want to look at what would happen if you couldn’t work, maybe because you got a really serious diagnosis, like cancer.”
There are a wide range of products available, Sutton says, but insurance needs can be boiled down to two main benefits: lump sums or monthly payouts. “In those lump sum trauma payment scenarios, it’s really about giving somebody immediate cash for serious health diagnoses to help them get treatment that isn’t government funded, go overseas for it, or pay for things like rent while they’re recovering.” Provided you’ve paid your premiums and had your claim accepted, it’s really up to you to figure out how to use the money in the best way, she tells me. Duly noted.
As someone who treats my piddly Sharesies and Recycle Boutique account as my “life savings”, this lump sum mention inspires another question: could my life insurance serve as another avant-garde savings method in these trying times? “No, and I think this is where it’s really important for people to understand what they’re buying,” says Sutton. “Insurance is pooled risk. If you cancel it, you don’t get the money back. Paying your life insurance premiums is not like putting money in a savings account for future drawdown. It’s really important that people understand that and again are thinking of insurance as part of their overall financial wellbeing.” Dammit.
Thankfully I am not alone in my aversion to (and confusion around) life insurance. Many New Zealanders don’t have it, even though death is a guarantee, Sutton tells me. “There is definitely an underinsurance issue here,” she says. “We find that people value their stuff typically more than they value themselves.” Especially during the pandemic, people were more likely to cancel their life insurance while still holding onto insurance for their house, contents and car. All their nice stuff.
“We live in a society where value is freely attributed to consumer goods. So, I get it. We all work hard for that stuff and want to hold on to it. But I do get concerned that people don’t consider what will happen if they can’t work because they’re ill or they suddenly don’t have income,” says Sutton. And along with all the news headlines of people cancelling their insurance right before a traumatic diagnosis or event, she’s seen firsthand what underinsurance can do.
“If I make it personal, my mum passed away two years ago. She didn’t have any kind of insurance. As a family, we had to figure it out: how on earth can we do the best for our loved one? What debts does she have that we need to settle? How do we celebrate her life and sort the immediate costs that we didn’t know we needed to plan for?”
Now with a brand new worry unlocked, I messaged my parents and asked them if either of them had life insurance. Mum messaged back first. “Yes, I do. I think. No idea who with or what I pay or what it’s worth.” In the words of will.i.am: I got it from my mama.
Sutton also stresses that if you do opt for insurance, it’s important to keep your details updated and let your family know that you’ve put cover in place. “I know that sounds really basic, but we’ve got to have up to date contacts for our customers.” She also adds that some insurance products offer a “holiday” option.
It’s not a tiki tour, though. It’s a break from paying your premiums if you hit a financial rut. “Some policies have a feature that means you can put a premium holiday in place, and you still have cover. This is another reason it’s really important to understand what you’re buying and to think about what is important to you to shape the cover you chose.”
Sutton says the most important thing for a worrywart like me to do is start somewhere. Whether it is doing my own research, talking to friends and family about what they have chosen for themselves, or putting something very small in place to scale up later as my life changes, she says “there’s no point worrying if you don’t take action.” Speaking of taking action, my dad rings me on the phone mere moments after I message him about his life insurance policy.
“Hello,” he says. “Are you trying to knock me off?” Good to have options, I suppose.
Disclaimer: The information in this article is a general summary only and is not personalised to your situation. Full details of the policy terms and conditions are available from Asteron Life Limited. Asteron Life is the underwriter of AA Life Insurance products. Asteron Life and AA Life Insurance offer customers different insurance products and benefits. If you would like advice which takes account of your particular financial situation or goals, please contact a financial adviser.
