How much cover can you actually get

Financial underwriting exists for a simple reason. Insurance is meant to restore a loss, not to create a windfall, and a policy worth far more than the financial loss it covers creates an incentive nobody wants to design into a contract. So insurers set limits on how much they will write relative to what you actually earn or owe.

In practice the limit is expressed as a multiple of income. The multiple is larger when you are young, because a 30-year-old has thirty-five years of earnings ahead and a 58-year-old has seven. It is insurer-specific, it changes, and no honest site will quote you a universal figure as though it were a rule.

The limits are rarely a problem for ordinary household cover. They start to bite when the sum insured runs well into seven figures, when income is variable, or when the cover is being taken for a purpose the insurer cannot see on a payslip.

If the limit is below what you need

1. 1Ask what evidence would support a higher figure. Income that includes bonuses, dividends or retained profit is often understated on a first pass.
2. 2Ask whether the purpose changes the assessment. Cover backing a specific debt or agreement is justified differently from general family cover.
3. 3Ask whether another insurer would take the full amount. Limits are not standard across the market.
4. 4Consider splitting the cover across two insurers, which is a normal arrangement rather than a workaround.
5. 5If none of that closes the gap, insure what you can now and use a future insurability benefit to increase later.

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

• Whether variable income — commission, bonuses, dividends — has been counted, and how it is averaged.
• Whether a recent income increase is supported by evidence, since insurers usually want more than a verbal figure.
• Whether the maximum for TPD or trauma is lower than for life cover, which it often is.
• Whether cover you already hold with other insurers counts against the limit, which it generally does.
• Whether the evidence requested is proportionate, and what happens to it after the application.

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.

• Financial underwriting limits are not published, and knowing where each insurer sits saves a declined or reduced application.
• Presenting self-employed income properly — which years, which add-backs — can change the maximum materially.
• An adviser knows when to approach a second insurer rather than push a first one past its appetite.
• Where a limit falls short, structuring the shortfall as a future increase under a special events benefit keeps the door open.

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.