Life insurance cost in your 50s

Your fifties are the decade in which the arithmetic of life insurance turns around. Until now the premium has been a manageable line in the budget. From here it climbs steeply, and the reason is simply that the probability of a claim is rising fast.

It is also the decade in which most New Zealanders on stepped premiums quietly cancel — an understandable decision made at exactly the wrong moment. The premium becomes uncomfortable at precisely the age when the cover is most likely to be needed, and when replacing it would be expensive or, with a health history, impossible.

There is a second story in the numbers at this age, and it is about smoking. A 55-year-old smoker pays thousands of dollars a year for cover that costs a healthy 30-year-old a few hundred.

Read the caption on this table carefully. It is a smoker profile, which is why the figures are an order of magnitude above the younger tables. It is not the number a 55-year-old non-smoker would pay, and we do not have a published non-smoker table at that age to show you.

By 50 the premium on the same cover has risen steeply again, and the gap between insurers has widened with it.

If you are on stepped premiums and it is getting expensive

1. 1Work out what you actually still need. A mortgage half repaid and children who have left home may mean a smaller sum insured is genuinely enough.
2. 2Reduce the sum insured before you cancel. Reducing never requires new medical evidence and it keeps the policy alive.
3. 3Ask whether your insurer allows a conversion to level cover, and whether there is an age limit on it.

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

• Whether your policy has a maximum expiry age you are approaching, and what happens when you reach it.
• Whether a level policy converts to stepped at expiry, which can produce a very large jump.
• Whether your health has changed since the original application — this affects whether switching is realistic.
• Whether the sum insured is still sized to a mortgage that has been paying down for fifteen years.

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.

• Reducing rather than cancelling is often the right answer, and an adviser will model what a smaller sum insured costs before you make the decision.
• Smoking status can be re-rated after a qualifying smoke-free period, and the saving at this age is the largest available anywhere in the market.
• Insurer appetite for health histories varies most at this age, so shopping a loading is worth real money.
• An adviser can tell you when your existing policy should be kept because its terms are better than anything currently sold.

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.