New Zealand life insurers paid $NZ1.13 billion ($1 billion) of claims last year, according to the country’s Financial Services Council (FSC).

Almost half the total was for term life benefits at $NZ421.8 million (396 million).

Whole life claims totalled $NZ200 million ($187 million) for the year.

Income protection trauma payments amounted to $NZ136.9 million ($128.6 million), while replacement income benefits totalled $NZ118.7 million ($111.5 million).

FSC NZ CEO Peter Neilson says life insurance members’ annual payout for personal cover has consistently exceeded $NZ1 billion ($939 million) since June 2011.

The figures show about 60% of personal insurance premium is attributed to life insurance products, but it is growing more slowly, at 4% a year.

This compares with income protection insurance products, growing at 7% a year.

“The growth in new business premium for income protection products has been higher than the growth in new premium for life products each quarter since September 2012,” Mr Neilson said. “Trauma and replacement income products also continue strong and steady growth.”

He warns many families remain financially vulnerable should main income-earners become unable to work because of illness.

“The increase in claims and coverage of income protection insurance products is therefore a trend to be welcomed,” Mr Neilson said.