What to look for in cover after 50

The over-50 conversation is genuinely different from the one at 35, and most material about life insurance is written for 35. At 35 the question is how much cover to buy. At 55 it is more often what the cover is still for, whether the structure is sustainable, and whether some of it can be released without losing the part that matters.

Two forces work against each other. The need usually shrinks — mortgages come down, children become independent, savings and KiwiSaver build. The cost usually rises sharply, because stepped premiums accelerate with age. The intersection of those two lines is where a lot of people cancel cover entirely, at exactly the age when a claim becomes likely.

There is usually a better answer than cancelling, and finding it starts with being precise about what the money would be for.

1. 1Work out what the cover is still for. Clearing remaining debt is one purpose. Supporting a partner who would lose your income or superannuation is another. Equalising an estate where one child inherits a business or a farm is a third. Funeral and final costs are a fourth. Each implies a different amount and a different term.
2. 2Subtract what is already there. Savings, KiwiSaver, employer cover, an older policy you had forgotten about. Many people over 50 are carrying more cover than their situation now requires.
3. 3Reduce rather than cancel. Reducing a sum insured never requires new medical evidence and cuts the premium immediately. Cancelling and re-applying later means being underwritten at your current age and health.
4. 4Look hard at premium structure. If cover is stepped and you intend to hold it into your sixties, ask what the premium becomes at 60, 65 and 70. If level is available to a useful expiry age, model both cumulative costs.
5. 5Check every expiry age in the policy. Trauma and TPD benefits frequently end earlier than life cover, and TPD definitions often convert to a much harder test somewhere in the sixties.
6. 6Consider whether you need cover at all. If nobody would be financially worse off — no debt, no dependants, adequate savings — then continuing to pay is a decision worth making consciously rather than by direct debit.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• Whether trauma or TPD benefits expire earlier than the life cover, and at what age.
• At what age the TPD definition converts to any-occupation or an activities-of-daily-living test.
• Whether indexation is still switched on, compounding both cover and premium at exactly the wrong time.
• Whether an old policy carries terms that are better than anything currently available.
• Whether the sum insured still matches a need that has probably shrunk.
• Whether funeral-style cover is being considered where ordinary underwritten cover would buy far more.

Every New Zealand insurer writes cover after 50 to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• An adviser can model reducing cover against cancelling it, and usually finds a middle option people had not considered.
• An adviser reads an existing wording before recommending any replacement, because older policies are sometimes better.
• Where health has changed since the original application, an adviser knows which insurers are most likely to take it well.
• An adviser will tell you when you no longer need the cover, which is the most valuable advice available at this age.
• Expiry ages and conversion clauses are easy to miss and an adviser checks them as a matter of routine.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.