Policy fees and discounts

The premium you are quoted has two parts. The risk premium is what it costs to insure you, and it moves with your age, health and sum insured. The policy fee is a fixed administrative charge, and it does not move at all.

That fixed component has a consequence people rarely notice. On a small sum insured the fee makes up a meaningful share of the premium, so the cost per dollar of cover is high. On a large sum insured it is trivial. It is one of the reasons stepping up from $500,000 to $750,000 usually costs less than a proportional increase.

Discounts work the other way — they make a policy look cheaper than it will be. Every published comparison table you will see, including the ones on this site, quotes premiums before discounts, because discounts depend on who you are and what else you buy.

The volume discount row is worth a moment. If a discount kicks in at a particular sum insured and you are just under it, increasing your cover slightly can reduce your total premium. That is an unusual outcome and it is worth asking about explicitly, because nobody volunteers it.

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

• Whether the quote you have been given is before or after discounts, since comparison tables are always before.
• Whether the policy fee is charged once or per benefit under the structure being proposed.
• Whether a wellness discount requires ongoing participation you will actually sustain.
• Whether a membership discount ends when the membership does.
• Whether consolidating covers to capture a multi-benefit discount costs you a better wording elsewhere.
• Whether the discount is applied to the risk premium, the policy fee, or both.

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.

• Which discounts you qualify for is not obvious and is rarely volunteered — an adviser knows what to ask for.
• Policy fee treatment differs between insurers and matters most when a household holds several covers.
• Chasing a multi-benefit discount can be the wrong call if it means consolidating onto a weaker wording, and that trade-off needs someone who reads both.
• An adviser can tell you when a first-year discount is masking a policy that is expensive from year two onwards.

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.