Will I face higher premiums if I don’t get the COVID-19 vaccine? See what the major insurance companies say.

02 Dec 2021

YG Financial Services works with you to follow the latest developments in the insurance industry

The world has been shrouded in the cloud of the COVID-19 pandemic for two years. Several vaccines have been available globally since late last year and, at present, countries all over the world (including New Zealand), are vigorously promoting vaccination. They all believe that this is an effective way to improve protection and build an anti-pandemic barrier. Only in this way can we get out from under the dark cloud of the pandemic and bring about a normal life of “coexistence with the virus”.

Image source: covid19.govt.nz

However, vaccination is voluntary and some people are still reluctant to get vaccinated, despite governments from around the world having introduced a variety of measures to encourage vaccination.

In response to this situation, some countries have introduced policies that have begun to put pressure on those who refuse the vaccine. For example, the Singapore government announced that starting from December 8, people who are eligible for vaccination but choose not to be vaccinated will have to pay for their own medical expenses if they are infected with COVID-19. The reason for this is that, of the COVID-19 inpatients who need intensive care, those who have not been vaccinated account for a considerable majority and are disproportionately increasing the burden on medical resources. Singapore’s Minister of Health, Ong Ye Kung, said; “Our hospitals really much prefer not to have to bill these patients at all, but we have to send this important signal, to urge everyone to get vaccinated if you are eligible.”

Image source: BBC

At present (as of November 25, 2021), 85% of New Zealanders have been vaccinated with two shots. Rod Jackson, an epidemiologist at the University of Auckland, has warned that even if the current vaccination target of 90% can be reached, there will still be 10% of eligible New Zealanders who are unvaccinated. Add to that the children under 12 and that makes more than 1.3 million people who would remain unvaccinated. Imagine what would happen if even 1 person out of every 500 became infected with COVID-19: it would still overwhelm New Zealand’s medical system.

The insurance industry is closely related to healthcare, so vaccines are also closely related to the insurance industry. So what is the attitude of the insurance industry towards people who refuse to be vaccinated? Will their premiums rise? In today’s article, YG Financial Services is here to share with you the views of New Zealand’s major insurance companies.

1.Supporter: insurance premiums may rise

Naomi Ballantyne (pictured below), managing director of the insurance company Partners Life, said that life insurance and medical insurance premiums may rise for people who refuse to get vaccinated.

Image source: stuff.co.nz

She said that the policy design and premiums of the personal insurance industry are based on medical science and statistical data. For insurance companies, people who have not been vaccinated (and especially those with underlying health conditions themselves), are considered to be at higher risk than those who have been vaccinated. In order to avoid all customers having to pay higher premiums to deal with the increased risk of COVID-19-related claims, life insurance companies should formulate different quotes for vaccinated and unvaccinated insurance applicants to reflect the different risk conditions.

Image source: stuff.co.nz

For example, an insurance company can add exclusion clauses to the insurance of people who are unvaccinated, or it can refuse to insure certain people if they are determined to have an existing health problem for which not being vaccinated will increase their risk of having to make a claim.

At present, insurance companies in South Africa and other countries have had a massive increase in insurance claims regarding deaths and hospitalizations due to COVID-19. Now these countries require people to state their vaccination status when applying for insurance. New Zealand will do the same sooner or later.

Ballantyne believes that the probability of vaccinated people being infected with COVID-19 and infecting others is relatively low, so hospitalization or death is unlikely. Most cases of infections, hospitalizations, and deaths are people who have not received two shots of the vaccine. People who by choice are not vaccinated have already made a personal decision to take more risk (risk of COVID-19 infection) – and insurance companies need to decide whether and how to accept and adapt to this risk.

Willowgrove Consulting Limited, an insurance consulting company that specializes in medical insurance, also supports this view. The owner of the company, Jon-Paul Hale, believes that the medical insurance industry should think carefully about the vaccination situation. COVID-19 will further exacerbate existing health problems and significantly increase claims, which will also increase insurance premiums. He suggested that medical insurance policies should add more options such as additional coverage requirements, discounts for vaccinated customers, and customers who have not been vaccinated would be charged additional premiums (loading), etc.

2.Wait and see: more data required

But not all insurance companies decisively support this. Most insurance companies say it is too early to make any decisions.

Grant Willis, head of Asteron Life (pictured below), said that Asteron Life is paying close attention to the medical development of COVID-19 and its long-term impact.

Image source: Asteron Life

“At this stage, we need more data to inform any decisions on how we underwrite for it in future.”

Asteron currently does not add COVID-19-related exclusion clauses to policies.

AIA NZ Acting Chief Executive Officer Sharron Botica has said that in the current AIA underwriting process, new customers are not required to disclose their vaccination status.

Southern Cross and NIB also stated that they do not request new customers to provide details of their vaccination status.

Simon Tohill, General Manager of Strategy and Marketing at Cigna New Zealand, said that for them it was too early to be sure of the impact of the government’s change in strategy from the previous “elimination of COVID-19” goal to the current “coexistence with COVID-19” tact. More information is needed.

Once these companies have considered this further, they will apply their conclusions to their insurance policies.

Should unvaccinated customers bear higher premiums? What is your opinion on this?

We welcome you to chat with YG Financial Services and follow the latest developments in the insurance industry together.


1. https://www.moh.gov.sg/news-highlights/details/calibrated-adjustments-in-stabilisation-phase_8Nov2021

2. https://www.health.govt.nz/our-work/diseases-and-conditions/covid-19-novel-coronavirus/covid-19-vaccines

3. https://www.newshub.co.nz/home/new-zealand/2021/11/have-your-say-should-the-government-deny-free-medical-treatment-to-unvaccinated-covid-patients.html

4. https://www.goodreturns.co.nz/article/976519608/unvaccinated-may-face-higher-premiums.html

5. https://www.stuff.co.nz/business/126797715/costs-of-covid-life-insurance-could-get-more-expensive-for-the-unvaccinated

6. https://www.goodreturns.co.nz/article/976519659/covid-vaccination-status-a-watching-brief-for-nz-insurers.html


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