It launched AMP Essentials this week, which it told advisers was a way to make insurance more affordable and accessible and to stem the flow of KiwiSaver members moving to banks.

An AMP Essentials policy can be issued online without medical checks, to AMP KiwiSaver members who answer two underwriting questions. It is only available to customers who have their KiwiSaver with AMP. If they leave the scheme, they lose their AMP Essentials cover.

Eighteen- to 30-year-olds can get temporary disablement cover up to $2083 a month for a year, trauma cover of $10,000 and life cover of $100,000 for $11.

Those aged 31 to 39 would pay $12 for the same amounts and customers aged 40 to 47 would pay $22. The price increases for older customers and the policies only cover people aged up to 60.

Under AMP Essentials Plus, customers would get twice as much life and trauma cover and $2916 a month in temporary disablement for $17 if they are 18 to 30, $20 if they are 31 to 39 and $38 if they are 40 to 47.

AMP general manager of investments and insurance Therese Singleton said it was an important type of product. “The concept of bundling life insurance is, we think, a really important part of the future of life insurance in New Zealand. New Zealand is so grossly underinsured, in large part related to the fact that there isn’t any employee benefit linkage between superannuation and life insurance. The KiwiSaver legislation is quite specific about the inability to take deductions from superannuation to pay for life insurance.”

But she said linking insurance to superannuation savings was an important part of solving the insurance issue for New Zealand.

“Given the size of AMP, the system capability we have and the depth of experience in working on large employer-based insurance and super schemes, that’s how we have created the opportunity.”

She said it was a basic product and would not be the complete solution to many people’s insurance needs.

“It’s low levels of cover but we are hoping it will lead to people being more comfortable with the concept of buying life insurance products.”

Those who wanted full financial advice would be passed on to advisers, she said.

Adviser Robert Oddy said AMP could face a hard slog to sell the product.

“If people don’t see the value in the first place I don’t know how successful it’s going to be but good on them for having a go.”

Murray Weatherston said it seemed to be the “McDonaldsisation” of KiwiSaver. “Do you want fries and some insurance with that? But the more products they have with a client the more likely they are to keep them.”