Insurance for Maori & Pasifika NZ: Closing the Protection Gap | QuoteHub

By QuoteHub Editorial Team · Updated 2026-01-09

Insurance for Maori and Pasifika Families: Closing the Protection Gap

New Zealand has a significant underinsurance problem. The Financial Services Council estimates that the country's total life insurance gap sits at around $900 billion, meaning Kiwi families collectively hold far less cover than they would need to maintain their standard of living if something went wrong. But this gap does not affect all communities equally.

Maori and Pasifika families are among the most underinsured groups in Aotearoa. Research consistently shows that Maori and Pacific peoples hold personal insurance at lower rates than the general population, despite facing higher health risks at younger ages. This is not a reflection of how much these communities value their families. It is a reflection of systemic barriers that have made insurance harder to access, harder to afford, and harder to trust.

This guide looks at why the protection gap exists, why it matters so much for whanau and aiga, and what practical steps you can take to get the right cover in place.

The Underinsurance Gap: What the Numbers Show

New Zealand is already one of the most underinsured countries in the OECD. When you break the data down by ethnicity, the picture becomes even more stark.

Key statistics worth understanding:

Only around 35% of New Zealanders hold life insurance. Among Maori and Pasifika communities, the rate is estimated to be significantly lower.
The Financial Services Council has identified that younger, lower-income, and non-European households are the most likely to have no personal risk insurance at all.
Maori median household income sits below the national average, which directly limits the budget available for insurance premiums.
Pasifika households are more likely to be multi-generational, meaning more people depend on fewer income earners. When one person in the household is unable to work, the financial impact ripples further.

The consequence is clear. The families who face the greatest financial risk from illness, injury, or death are often the least likely to have protection in place.

Health Disparities Make Insurance More Important, Not Less

One of the most important things to understand is that Maori and Pasifika communities face well-documented health disparities compared to the general population. These are not theoretical. They show up in the data consistently.

Cancer. Maori have higher cancer incidence and mortality rates than non-Maori New Zealanders. Pasifika communities also experience higher rates of certain cancers. Importantly, diagnoses often occur at younger ages.

Cardiovascular disease. Heart disease and stroke affect Maori and Pasifika populations at disproportionately high rates. The Ministry of Health reports that Maori are roughly 1.5 times more likely to die from cardiovascular disease than non-Maori.

Diabetes. Type 2 diabetes rates among Maori are approximately three times higher than among NZ Europeans, and among Pasifika peoples the rate is higher still. Diabetes is a leading cause of complications that can affect the ability to work.

Life expectancy. Maori life expectancy remains approximately seven years lower than for non-Maori. For Pasifika peoples, the gap is also significant.

Some people look at these statistics and conclude that insurance is too expensive or too difficult to obtain for Maori and Pasifika families. That is the wrong conclusion. These health realities mean that the financial consequences of illness or early death are more likely to materialise, which makes having a safety net more important, not less.

A life insurance policy or income protection plan is precisely the tool designed to protect families from these risks.

Barriers to Getting Insured

If insurance is so important for Maori and Pasifika families, why do so many go without it? The barriers are real and worth naming honestly.

Cost and Competing Priorities

Many Maori and Pasifika households operate on tight budgets. When the choice is between groceries, rent, school fees, koha, church donations, and insurance premiums, insurance often falls off the list. This is a rational response to immediate financial pressure, but it leaves families exposed to much larger costs down the line.

The average tangihanga (Maori funeral) costs between $8,000 and $15,000, and can be considerably more. Pasifika funerals, with cultural obligations around fa'alavelave and community contributions, can easily reach similar amounts. Without insurance, these costs fall directly on the whanau at the worst possible time.

Trust and Historical Experience

Many Maori and Pasifika families have a well-founded wariness of financial institutions. Historical experiences with predatory lending, complex financial products, and a general sense that the financial system was not built with their interests in mind all contribute to low trust. Insurance companies are not exempt from this.

When the industry has historically used language, processes, and marketing that does not reflect or include Maori and Pasifika communities, it is understandable that those communities have not engaged with it.

Complexity and Jargon

Insurance is a complex product even for people who work in finance. Terminology like "indemnity value," "waiting periods," "benefit periods," and "exclusions" can be a barrier for anyone, but particularly for communities where English may be a second language or where financial literacy education has been less accessible.

If you have ever felt overwhelmed by insurance jargon, our insurance terminology guide breaks down the key terms in plain language.

Cultural Factors

In many Maori and Pasifika families, discussing death, serious illness, or financial vulnerability can feel culturally uncomfortable. There is a strong orientation toward collective support, which is a tremendous strength, but it can also create an assumption that "the whanau will sort it out" without a formal financial plan in place.

The reality is that collective support and insurance are not in competition. Having insurance in place actually strengthens the whanau's ability to support each other, because it removes the financial crisis from an already difficult situation.

BMI and Underwriting: An Important Conversation

One barrier that deserves its own section is how insurers assess body weight during the application process.

Most New Zealand insurers use Body Mass Index (BMI) as part of their underwriting. BMI is a simple ratio of weight to height. The problem is that BMI does not account for differences in body composition between ethnic groups.

Research published in the New Zealand Medical Journal and by international health bodies has shown that Maori and Pasifika peoples tend to carry more lean muscle mass and have a different fat distribution pattern compared to European populations. A Maori or Pasifika person with a BMI that would be classified as "obese" on a standard chart may, in fact, have a healthy body composition with a higher proportion of muscle.

Despite this, many insurers apply the same BMI thresholds across all applicants. This can result in:

Higher premiums for Maori and Pasifika applicants.
Exclusions or restrictions placed on policies.
Declined applications in some cases.

What is changing. The insurance industry in New Zealand is gradually acknowledging this issue. Some insurers now take a more holistic approach to underwriting, considering waist circumference, overall health markers, and ethnicity-adjusted assessments rather than relying solely on BMI. This is a positive development, but progress has been slow.

What you can do. Working with an authorised financial adviser who understands these issues can make a significant difference. A good adviser will know which insurers take a more nuanced approach to underwriting for Maori and Pasifika applicants, and can advocate on your behalf during the application process.

How the Industry Is Improving

It is fair to say the insurance industry has historically done a poor job of serving Maori and Pasifika communities. But there are genuine signs of change.

Fidelity Life and Ngai Tahu

Fidelity Life is New Zealand's largest locally owned life insurer. It is partly owned by Ngai Tahu Holdings, the investment arm of the Ngai Tahu iwi, alongside the New Zealand Super Fund. This ownership structure means that a major iwi has a direct stake in the success and conduct of a life insurance company.

Fidelity Life has actively worked to improve accessibility and cultural responsiveness in its products and processes. Their involvement is a meaningful signal that the insurance industry can serve Maori communities authentically.

Industry Initiatives

Several developments are worth noting:

The Financial Services Council has published research specifically addressing the underinsurance gap among Maori and Pasifika communities.
Some adviser groups are actively recruiting Maori and Pasifika advisers to better serve these communities.
Plain-language policy documents and multilingual resources are becoming more common, though there is still a long way to go.
The Financial Markets Authority (FMA) has emphasised fair conduct obligations that require insurers to consider the needs of all customer groups, including those who have historically been underserved.

Practical Steps to Get Your Whanau Covered

If you are ready to look into insurance for your family, here is a practical roadmap.

1. Start with the Basics

You do not need to get everything at once. Focus on the covers that would make the biggest difference if something went wrong.

Life insurance is usually the first priority. It pays a tax-free lump sum if you die or are diagnosed with a terminal illness. This money can cover the mortgage, daily living costs, tangihanga expenses, and give your whanau time to grieve without financial crisis.

Income protection is the second priority. It replaces up to 75% of your income if you cannot work due to illness or injury (ACC only covers accidents, not illness). For families where one or two incomes support many people, this cover is critical.

For a detailed comparison of life insurance providers, see our guide to the best life insurance in NZ.

2. Talk to an Adviser

An authorised financial adviser can assess your situation, recommend appropriate cover levels, and compare policies across multiple insurers. Importantly, a good adviser will:

Understand the BMI and underwriting issues outlined above.
Know which insurers are most flexible for Maori and Pasifika applicants.
Explain everything in plain language.
Not pressure you into buying anything.

Most advisers in New Zealand are paid by the insurance companies (via commission), not by you. This means getting advice typically costs you nothing directly.

Get a free, no-obligation insurance assessment from a QuoteHub adviser.

3. Be Honest on Your Application

This is important. When applying for insurance, you must disclose your full medical history, lifestyle, and any relevant information. Failing to disclose something can result in a claim being declined later, which is the worst possible outcome for your family.

Being honest does not mean you will be declined. It means the insurer can assess your actual risk and offer appropriate cover. Many people with pre-existing conditions, including diabetes and heart conditions, can still get insurance. The terms may be adjusted, but having some cover is vastly better than having none.

4. Involve the Whanau

Insurance works best when it is part of a broader family conversation about financial security. Consider discussing:

Who are the key income earners, and what would happen if they could not work?
What debts does the family carry (mortgage, personal loans, credit cards)?
What would tangihanga or funeral costs look like, and who would bear them?
Are there tamariki or mokopuna who depend on the family financially?

These are not easy conversations, but they are important ones. Having insurance is one of the most practical ways to express aroha and responsibility for your whanau's future.

Affordability Strategies

Cost is a genuine barrier, so here are specific strategies to make insurance more accessible.

Start small and build. Even a modest life insurance policy of $100,000 to $200,000 is better than nothing. You can increase your cover as your budget allows.

Choose longer waiting periods. For income protection, a 13-week waiting period instead of a 4-week waiting period can significantly reduce premiums. If your whanau could manage for three months using savings, sick leave, or family support, this is a smart trade-off.

Consider stepped premiums. Stepped premiums start lower and increase as you age. They are more affordable in the short term, which can be the right choice if budget is tight now but you expect your income to grow.

Use fortnightly or monthly payments. Most insurers offer fortnightly or monthly premium payments at no extra cost. This makes budgeting easier than paying annually.

Review regularly. Your insurance needs change over time. As your mortgage decreases or your children become independent, you may be able to reduce cover and save on premiums.

Get multiple quotes. Premiums vary significantly between insurers. An adviser can compare the market for you at no cost. Start a free comparison here.

Tangihanga and Funeral Costs

Tangihanga hold deep cultural significance for Maori. They are a time for whanau to come together, to honour the person who has passed, and to grieve collectively. But they also carry real financial costs.

A tangihanga typically involves:

Preparation and transport of the tupapaku (body).
Marae costs, including kai for manuhiri over multiple days.
Koha and cultural obligations.
Headstone and urupa (cemetery) costs.

Total costs commonly range from $8,000 to $15,000, and can be higher depending on circumstances. For Pasifika families, funeral and cultural obligations can be similarly significant.

Funeral cover or a small life insurance policy can ensure these costs do not create financial hardship for the family. Some policies specifically include a funeral benefit that pays out quickly, often within 48 hours of notification, to cover immediate expenses.

The Role of Whanau in Financial Planning

One of the great strengths of Maori and Pasifika communities is the depth of family connection and collective responsibility. This is something the insurance industry could learn from, not the other way around.

Financial planning does not have to be an individual exercise. In fact, it works better when the whole whanau is involved. Some practical approaches:

Whanau hui about finances. Setting aside time to discuss financial goals, risks, and responsibilities as a family can normalise these conversations and lead to better outcomes for everyone.
Coordinated cover. If multiple family members are supporting the same household, coordinating insurance cover ensures there are no gaps and no unnecessary duplication.
Supporting rangatahi. Helping younger family members understand insurance early, even before they need it, builds financial capability that benefits the whole whanau over time.
Kaumatua and kuia. Older family members may have different insurance needs, including health insurance for elective surgery wait times and funeral cover. Including them in the conversation ensures they are not overlooked.

Insurance is not a replacement for whanau support. It is a tool that makes whanau support more effective by removing the financial burden from an already difficult situation.

Frequently Asked Questions

Can Maori and Pasifika people get life insurance with pre-existing conditions like diabetes?

Yes. Many people with Type 2 diabetes and other pre-existing conditions can still get life insurance and income protection in New Zealand. The insurer may apply a loading (higher premium) or an exclusion for certain conditions, but cover is often available. An authorised financial adviser can help you find the insurer most likely to offer favourable terms for your specific situation.

Does BMI unfairly affect Maori and Pasifika insurance applications?

Standard BMI thresholds do not account for ethnic differences in body composition. Maori and Pasifika peoples tend to have higher lean muscle mass, which can inflate BMI readings. Some insurers are moving toward more holistic assessments. Working with an adviser who understands this issue is the best way to navigate the underwriting process.

How much does life insurance cost for a 35-year-old?

For a non-smoking 35-year-old, life insurance of $500,000 typically costs between $35 and $55 per month on stepped premiums, depending on the insurer and your health profile. Premiums vary, so comparing quotes across multiple insurers is important. You can get a free comparison through QuoteHub.

Is funeral cover worth getting separately?

It depends on your situation. If you already have a life insurance policy, the payout will cover funeral and tangihanga costs along with everything else. However, if you do not have life insurance and want to ensure tangihanga costs are covered immediately, a standalone funeral policy or a small life insurance policy with a funeral advance feature can be a practical solution.

What is the difference between ACC and income protection?

ACC covers lost income from accidents only. It does not cover illness. Income protection insurance covers you if you cannot work due to illness, such as cancer, heart disease, or mental health conditions. Given the health disparities that Maori and Pasifika communities face, income protection is particularly important. Our income protection comparison guide explains the options in detail.

Do I need to pay for financial advice?

Most insurance advisers in New Zealand are paid by the insurer, not by you. This means you can get personalised advice, a needs assessment, and a market comparison at no direct cost. QuoteHub connects you with authorised advisers who can help you find the right cover for your whanau.

Closing the Gap

The underinsurance gap affecting Maori and Pasifika communities is not inevitable. It is the result of specific, identifiable barriers, and those barriers can be addressed.

The insurance industry has a responsibility to do better: to underwrite more fairly, communicate more clearly, and make products genuinely accessible to all New Zealanders. Progress is happening, but it is not fast enough.

In the meantime, the most powerful thing you can do for your whanau is to take action. Start the conversation. Talk to an adviser. Get a quote. Even a small amount of cover is infinitely better than none.

Your whanau's financial security is worth protecting. Insurance is one of the most practical ways to do that.

Get a free insurance check for your whanau with QuoteHub.

QuoteHub is an authorised financial advice provider (FSP 712931). The information in this article is general in nature and does not constitute personalised financial advice. We recommend speaking with an authorised financial adviser to discuss your specific circumstances.

References

Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance.