The cost of $500,000 of life insurance

$500,000 is the standard comparison amount in the New Zealand market, which is useful for us and slightly dangerous for you. Useful, because it means there is published pricing to show. Dangerous, because a round number that matches a mortgage balance feels like an answer, and a payout that exactly clears the mortgage leaves a household with a house and no income.

Think about what $500,000 has to do. If it clears a $500,000 mortgage, the survivor keeps the home — and then has to run it, feed the children, and fund childcare on one income. If instead the mortgage is $300,000, the same $500,000 clears the debt and leaves $200,000, which is roughly two to four years of a typical household’s costs depending on how you live.

That is the honest way to read this number: not as a target, but as one input against your own debt and your own household spending.

Monthly figures, and what women pay

Women pay less than men for identical life cover at every age, and the gap is widest when they are youngest — it reflects mortality, not policy. That is mortality data doing its work, not a discount.

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

• Whether $500,000 was chosen because it matches your mortgage, and whether that leaves the income gap unfunded.
• Whether indexation will lift the sum insured each year, and whether the premium rise that comes with it is acceptable.
• Whether the quoted premium is stepped or level — the same sum insured prices very differently.
• Whether the figure you have been quoted includes a first-year discount that unwinds in year two.
• Whether $600,000 or $750,000 costs materially more. The step up is often smaller than expected.

Every premium figure on this page is a published market example, not a quote we have generated. Here is exactly what they are.

• No public source ranks New Zealand life insurers on price in a way that survives scrutiny. Insurers assess the same applicant differently, so the cheapest option is a property of your file rather than of the insurer. That is precisely what an adviser is for.
• There is no neutral published table that ranks New Zealand life insurers on price. Insurers do not release comparable rate cards, and the order changes with age, smoking status, occupation and health history. The only figure that means anything is the one your own application produces.
• Both exclude every discount — healthy-lifestyle, membership, multi-benefit and first-year — and both assume a clean health history with no loading applied.
• Neither reflects policy fee treatment, CPI indexation or the cost of riders, and published rates change between updates.

Your own number comes from an insurer in writing, after underwriting. Treat these figures as the shape of the market rather than as your price.

Every New Zealand insurer writes what life insurance costs in nz 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.

• Insurer ordering on price changes with age, so the cheapest insurer for a 30-year-old is often not the cheapest for a 45-year-old.
• Discounts excluded from published tables can change which insurer is actually cheapest for you.
• A health history that attracts a loading with one insurer can be accepted at standard rates by another.
• Where a couple are both insuring, structuring both policies with one insurer may attract a multi-benefit discount.

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.