How much insurance do you need?

As wealth grows, the insurance cover you require naturally falls toward zero.

Executive Summary

Our view is simple: your insurance should reflect the risks you personally choose to carry, balanced against the cost of covering those risks. We focus on lowering your insurance costs so you can afford the right amount of protection.

The key risks include:

• Losing your income and being unable to cover living costs or save for retirement.
• Passing away unexpectedly and leaving family with debt or without financial support.
• Suffering a major illness or injury and experiencing delays in a stretched public health system, including limited access to some non-Pharmac medications.

The only way to structure insurance efficiently is to consider your Target Retirement Income (TRI) and your current investments (KiwiSaver, property, and other assets). Without this, Kiwis often end up over-insured and wasting premiums, or under-insured and exposed to major gaps.

1) Insurance and investments should be linked. It is the best way to reduce lifetime costs

Most people buy insurance as if their wealth will never change. But as savings, KiwiSaver, and investments grow, your need for cover naturally falls. Investments begin producing passive income that replaces insurance, protects your retirement, and provides for your family if you pass away. Linking cover to wealth means you can safely reduce premiums over time instead of paying for risks you no longer have.

2) Costs fall further when wealth is managed properly, including our $1,000 or 12-month premium rebate* for any new policy

Because we manage both investments and insurance, we can structure your cover more efficiently from the start, reducing unnecessary premiums rather than competing with your long-term wealth.

We offer a $1,000 or 12-month premium rebate (*whichever is lower) on any new policy and a $100 KiwiSaver rebate for following our KiwiSaver advice, alongside AIA Vitality health discounts and tiered Peace-of-Mind options.

Together, these help lower costs while keeping your Target Retirement Income (TRI) protected.

3) Traditional adviser incentives work against you. They are paid more when your cover goes up, not down

Many advisers aren’t trained to integrate investments, can’t calculate cover around TRI, and are paid trail commissions that fall when they reduce your cover. As income or obligations increase, many advisers automatically increase insurance without considering your growing assets.

Our incentive model is the opposite: as your wealth grows, we aim to decrease your cover as soon as it’s safe, so more of your money goes into building wealth, not paying premiums.

How you can lower your Personal Insurance cost

Most New Zealanders treat insurance as something you “set and forget,” adjusting it only when premiums rise or life events change. But insurance is not static. It is a financial tool that can either protect your wealth or quietly erode it. Whether it helps or harms depends on one thing: whether your insurance strategy is linked to your investment strategy. For most people, it isn’t, and that gap can cost them a significant portion of their future retirement income.

The real problem is structural. Advisers are rarely trained to integrate investments with insurance, they lack the tools to calculate cover based on Target Retirement Income (TRI), and the commission model rewards maintaining or increasing cover rather than reducing it as wealth grows. That’s why so many Kiwis end up paying too much, protecting too little, and never adjusting cover as their assets rise.

“What follows are The Seven Hard Truths of Insurance in New Zealand.”

What follows are The Seven Hard Truths of Insurance in New Zealand, split into two parts:

• A. How linking investments and insurance reduces lifetime costs, and
• B. How current adviser incentives can prevent this from happening.

Together, these truths show why aligning your cover with your wealth may be one of the most important financial decisions you ever make.

Section A: Linking Investments & Insurance

(How we reduce your long-term insurance costs while protecting your target retirement income (TRI))

1) Your investments generate passive income, which reduces how much insurance you actually need

As your wealth grows, your assets start producing passive income that can replace salary, fund living costs, and provide for your family if you pass away.

This means you naturally require less income cover, trauma cover, and life insurance, and in many cases, none at all.

Growing wealth increasingly replaces the need for insurance. Many advisers overlook this link.

2) Our rebate programme reduces the cost of getting the right cover

We reduce your upfront burden by offering:

• $1,000 or 12 months of premiums (whichever is lower) as a rebate, and
• A $100 KiwiSaver rebate if your KiwiSaver is advised by us.

This lowers the cost of getting the right cover in place and is possible because we focus on both investment growth and insurance, not just one. By understanding how your wealth builds over time, we can structure your cover more efficiently from the start, reducing unnecessary expense while keeping your long-term goals intact.

3) Becoming healthier through AIA Vitality reduces premiums even further

By using AIA Vitality, you can earn premium discounts, rewards, and ongoing savings.

The healthier you are (and the more Vitality goals you hit), the lower your long-term insurance costs become. Better health can reduce your premiums, boosting your wealth.

4) You can lower costs by accepting more (or less) risk, through our Peace of Mind options

Our four “Peace of Mind” levels let you choose how much risk you want to self-insure.

Covering fewer events means lower premiums, and as wealth grows, you can safely shift from what we call 100% protection toward 75%, 50%, or even 0% cover.

Instead of paying for everything forever, you only pay for what you truly need.

Section B: Insurance Adviser Incentives

(Why most Kiwis end up with too much cover and pay far more than necessary)

5) Most advisers are not trained to link insurance with investments

New Zealand’s advice system is fragmented. Many advisers are licensed for only one world, either insurance or investments.

Very few are trained to integrate both, meaning many insurance plans ignore your assets altogether.

Without investment knowledge, advisers default to selling more insurance, not less.

6) Many advisers cannot calculate cover based on TRI. We can

Traditional advisers lack the tools and modelling needed to align insurance with a client’s Target Retirement Income (TRI).

Collies Wealth uses a proprietary calculator that links your assets, liabilities, cover levels, TRI, and compounding into one integrated plan, meaning we can identify exactly when and how fast your cover should decrease.

7) Advisers are financially incentivised to increase your cover, never reduce it

Insurance advisers receive ongoing trail commissions. If they reduce your cover, their income drops.

If they increase your cover, their income rises. This incentive structure means advisers often raise cover when:

• Your income goes up
• You have more children
• You take on more debt

Those reasons may be valid, but when they ignore your investment value or investment growth, they miss the far bigger picture: your need for cover should be declining, not rising.

This is why some Kiwis unknowingly pay for more insurance at a time they should be paying less.

Collies Wealth flips the incentive. We manage both your insurance and your investments, so we are rewarded when your long-term wealth grows.

Conclusion

Talk to us about your cover