What to look for in life insurance

The question “which is the best life insurance in New Zealand” has no answer, and the reason is structural rather than evasive. A life policy is a contract between one insurer and one person with one medical history. Reinsurers take different views of the same condition, and appetite is renegotiated without announcement. The insurer taking a treated thyroid condition at standard rates this year may not next year.

So the honest version of the question is: what does a good policy look like, and how do I recognise one? That can be answered, and it is worth more than any ranking because it survives changes in the market.

Work through the criteria below in order, roughly by how much money each moves over the life of a policy.

1. 1The right products, in the right order. Protect the income first, because it pays for everything else including the other premiums. Then the debt. Then a lump sum for the family. Most people buy in the reverse order because life cover is the product they have heard of.
2. 2A sum insured sized against real liabilities. Mortgage balance, other debt, the years until the youngest child is independent, the income the household relies on — less what you already hold and can access. A round number is a guess.
3. 3A premium structure you can sustain. Stepped is cheap now and expensive at 60, which is when people cancel and when claims become likely. Level costs more early and fixes the age-related increase to a chosen expiry age. Ask for cumulative cost under both, modelled at more than 3% a year.
4. 4Definitions you have actually read. Terminal illness at 12 or 24 months. The trauma definitions for the major conditions. Own-occupation TPD and the age it converts. The income protection offset clause. These decide claims and none appear in a quote.
5. 5Future insurability. The right to increase cover after a birth, a house purchase, a marriage or a salary rise without new medical evidence. It is the benefit that protects you against your own future health, and the triggers and caps differ between insurers.
6. 6An underwriting outcome you have tested. If your history is anything but simple, a pre-assessment across several insurers before any formal application is the highest-value step available to you.

How to build your own shortlist

• Write down what you are insuring and for how long, before looking at any product.
• Get quotes on matched terms — same sum insured, structure, expiry age, waiting and benefit periods, indexation setting.
• Read the full policy wordings, not the summaries. The wording is the contract.
• Pre-assess any non-trivial health history across insurers before making a formal application.
• Compare the household total including policy fees and discounts, not the per-benefit rate.
• Then choose, and diarise a review for the next time your life changes.

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

• Any site presenting a ranked list of New Zealand insurers without saying what the ranking is based on.
• Quotes that are not matched — a different waiting period or expiry age makes the comparison meaningless.
• Cover sized to a round number rather than to your actual debts and dependants.
• Stepped premiums taken without modelling what they become at 60 and 65.
• Indexation switched on by default, lifting both cover and premium each year unless declined.
• A policy bought because it was cheapest, without anyone reading the definitions.

Every New Zealand insurer writes life and living cover 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.

• The one variable that decides most outcomes — how each insurer would treat your history — is not published and is only obtainable through a panel relationship.
• An adviser sizes the cover against your actual liabilities rather than a rule of thumb.
• An adviser models stepped against level to the age you will really hold the cover, not just this year’s premium.
• An adviser will tell you when you do not need more cover, which is a service a comparison table cannot provide.
• At claim, an adviser assembles the evidence and argues the definition.

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.