Does Personal Insurance Really Pay?
Navigating the landscape of personal insurance claims in New Zealand reveals a reassuring trend: the vast majority are honoured by insurers. For instance, Asteron Life reported a 97% acceptance rate for Trauma, Life, and Income Protection claims between July 2023 and June 2024, amounting to $112 million in payouts. Similarly, AIA New Zealand accepted 93% of claims in a recent year, disbursing $646.4 million, with life insurance claims constituting 42% of this total.
Across the industry, our insurers proudly share that there is a 90%+ acceptance rate of personal insurance claims. So when claims are declined, it's not usually because the insurer is unwilling to help—it's often due to something much simpler and avoidable: non-disclosure.
What is Non-Disclosure?
Non-disclosure happens when someone applying for insurance doesn’t provide full and accurate information. This might be intentional—but more often, it’s accidental. People forget to mention a health condition they had years ago or don’t think something is relevant. Unfortunately, insurers rely on full disclosure to assess risk and decide on cover. If key facts are missing, the policy can be considered void—and any future claims may be denied.
According to the Insurance & Financial Services Ombudsman (IFSO), non-disclosure is one of the most common reasons claims are declined. Their reports show that:
39% of non-disclosure cases relate to undisclosed medical conditions.
29% involve criminal convictions that were not declared.
Others involve previous declined claims or cancelled policies that were not disclosed.
Real Consequences
Failing to disclose relevant information can lead to:
Claim denial, even if the undisclosed detail seems unrelated to the current claim.
Policy avoidance, meaning the insurer treats the policy as if it never existed.
Future insurability issues, as having a voided policy on record can make getting cover harder in the future.
These outcomes can be devastating—especially when people are relying on insurance to protect their families, homes, or businesses during tough times.
The Law May Be Changing—But You Still Need to Be Careful
The IFSO has supported changes to New Zealand’s insurance laws to make the process fairer for consumers. In particular, they advocate for rules that distinguish between deliberate and unintentional non-disclosure. But until those changes are in place, the responsibility still lies with the customer to disclose everything relevant when applying.
How to Protect Yourself
At New Vision, we guide our clients through the application process carefully to avoid these pitfalls. Here are our top tips to make sure your claim will stand up when it’s needed:
Be completely honest when answering questions—if in doubt, disclose.
Update your insurer if your circumstances change (e.g. medical conditions, job role).
Review your application with your adviser—we’re here to help you get it right.
Final Thought
Insurance is designed to give you peace of mind—but it only works if it's set up properly from the start. If you're unsure about your current policy or want to know if you're fully protected, talk to us at New Vision. We'll make sure your cover does what it’s meant to—when you need it most.
Amy Callon
Financial Adviser
New Vision Financial Services
Plan your future and let us help you have peace of mind along the way.