Life insurance cost in your 40s

The forties are when the numbers get serious in both directions. Household income is usually at its highest, and so is everything the household owes — a mortgage topped up for a renovation, children in the years where they cost the most, and often one partner on reduced hours.

It is also the decade in which insurance stops being cheap enough to ignore. Between 40 and 45 the premium for the same cover rises sharply. Age is priced on a curve, and the curve steepens.

The trap is that stepped premiums at 42 still feel affordable, so people take them, and the annual increases feel small enough to absorb each year. The increases are not small; they are compounding. The consequence lands in the sixties, when a large stepped premium arrives at exactly the point when the claim is most likely and the household income is falling.

Two things are worth reading out of that pair. The first is the size of the five-year jump. The second is that the ordering changes — the insurer that is second-cheapest at 40 is not second-cheapest at 45. Rate tables are not parallel lines, which is why re-quoting matters more than loyalty.

The structure decision, made properly

At this age the stepped-versus-level question stops being academic. If you expect to hold cover to 65 or beyond — and most people with a mortgage and teenagers do — the total cost under stepped will exceed level well before you stop paying.

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

• Whether your sum insured still matches a mortgage that has been topped up since the policy started.
• Whether a health issue that has appeared in the last few years affects your ability to increase cover.
• Whether indexation has been quietly increasing your premium each year — and whether you want it to continue.
• Whether your income protection benefit still matches your current income, which has probably risen.

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

• 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.
• New Zealand insurers do not publish rate cards you can lay side by side, so no public table ranks them honestly on price. Which insurer is cheapest moves with age, smoking status, occupation and — most of all — health history. Your own application is the only thing that settles it.
• 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.

• This is the age at which switching insurers gets risky, because a health history acquired since your original application can be excluded or loaded on a new policy.
• An adviser can compare the cost of keeping an old policy against replacing it, including what you would lose in the switch.
• Converting part of an existing stepped policy to level is possible with some insurers and age-limited with most.
• Rate table ordering changes with age, so the insurer that was cheapest when you bought at 32 may not be now.

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.