New Zealand’s total annual inforce life insurance premium was $NZ1.9 billion ($1.76 billion) last year, after rising 43% over the past five years.

The Financial Services Council of New Zealand (FSCNZ) says many people still lack income protection, despite significant losses caused by long-term sickness.

However, total annual inforce income protection premium has grown 54% to $NZ722.2 million ($669 million) in the past five years.

CEO Peter Neilson says this trend is particularly welcome.

“The good news from the latest numbers is more New Zealanders now have coverage for the most likely threat to their financial position – being unable to work because of long-term sickness,” he said.

FSCNZ research shows most people do not know they are 2.6 times more likely to miss work for six months or longer due to illness, rather than an accident.

“While 80% of earners’ incomes are covered by the Accident Compensation Corporation for an accident, households with annual incomes of more than $20,000 do not qualify for sickness benefits,” Mr Neilson said. “Our research in late 2012 indicated 972,700 households with incomes of $20,000 or more a year had no income protection.”

The research showed main income-earners fell ill for 3-6 months in 13,030 households, compared with 10,300 losing income after accidents.

In 14,980 households the main income-earner fell ill for six months or longer.