Life insurers have paid out more than $1 billion in claims for a fifth year in a row.
But the rise in payouts has been outstripped by rising premiums for certain kinds of insurance.
Financial Services Council (chief executive Peter Neilson said its members had paid out $1.13b (FSC) in claims in the year to June 30, including claims on life insurance and income protection policies.
Since 2011 annual life insurance premiums paid have increased from $835m to $1.01b in 2014, FSC statistics show.
Trauma and income protection have also seen premiums rising faster than claims paid.
Replacement income claims were just over $17m higher in 2014 than in 2011.
Insurance coverage remained patchy with three-quarters of households not insured against the threat of serious illness, Neilson said.