It has conducted research that shows 40% of New Zealanders do not have any kind of life insurance., including life insurance, trauma and income protection.

Only 16% are thinking about getting it in future.

It said New Zealand had the third-lowest penetration of insurance among the OECD countries. Only Greece and Mexico have less personal insurance.

Bull said New Zealand’s market penetration stood at 0.9%, compared to the OECD average of 5%.

The main life triggers for taking out life insurance included planning for the future (40%), having children (36%), marriage or permanent relationship (25%) and buying a house for the first time (24%).

The main reasons for not having life insurance is a belief that it is not relevant to their life stage (38%) and that life insurance isn’t necessary (22%).

"As an insurer we are raising this because we see the impact of underinsurance every day when New Zealanders are faced with an impossible decision, such as not being able to have the time off work to recover fully because they can't afford to keep paying their home loan,” he said.

"We are trying to encourage every New Zealander to have a plan for their finances if the worst happens."

Sovereign is offering $10,000 in cover for six months via its Facebook page. Bull said: “We wanted to find an innovative way to address the issue of underinsurance in the risk segment specifically, which is one of the reasons why we have done the Facebook campaign.”