Insurance and your mortgage adviser

There is a structural reason insurance and mortgages arrive together. Buying a house is the moment a household takes on the largest debt of its life and, for the first time, has an obvious answer to the question of why cover matters. It is also the moment a professional is already sitting across the table with your income, your debt and your family circumstances written down. Selling insurance at that point is efficient, and it genuinely gets cover in place for people who would otherwise never arrange it.

The problem is the clock. Settlement conversations happen in the last fortnight before a deadline that cannot move, alongside conveyancing, valuations and a bank’s conditions. Decisions made under that pressure tend to default to whatever is quickest — the product in front of you, a stepped premium because it is cheaper this month, a sum insured that fits the remaining budget.

None of that means you should refuse the conversation. It means you should recognise which conversation you are in, and be willing to say that the insurance can be finalised properly after settlement.

What a lender can and cannot require

A lender can require you to hold house insurance over the property it is securing, and it can require evidence of it. It cannot require you to buy life, trauma, TPD or income protection from any particular provider, and personal risk cover is not a condition of a loan approval. If a conversation leaves you with the impression that it is, that impression is wrong and worth challenging directly.

Questions worth asking your mortgage adviser

• Do you specialise in personal risk, or is insurance a secondary part of your practice?
• How many insurers can you access for life cover, and are there any you cannot place business with?
• How are you paid on the insurance, as distinct from the lending?
• Will I get a written recommendation explaining why this cover and this insurer?
• Can we finalise the insurance after settlement so I have time to read the wording?
• What is your process if I need to claim in five years?

What good looks like at settlement

1. 1A fact find that covers dependants and income, not just the loan amount.
2. 2A recommendation that considers income protection, not only life cover sized to the mortgage.
3. 3A conscious decision about stepped or level, with the long-run cost shown rather than assumed.
4. 4The policy wording provided before you apply, not after the policy is issued.
5. 5Ownership and beneficiary nominations discussed, since a new mortgage often coincides with a new relationship structure.
6. 6A diarised review, because the mortgage will be smaller in five years and the cover should follow.

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

• Time pressure is the real risk at settlement, not the adviser’s intentions.
• Cover sized only to the loan usually leaves the income — the more likely claim — uninsured.
• Stepped premiums chosen at settlement are the most commonly regretted decision in this market.
• Bank-arranged cover is a single insurer’s product, sometimes with narrower definitions than a market comparison would find.
• Rushed disclosure to meet a settlement date is the single most expensive shortcut available.
• You are entitled to the adviser’s disclosure information — scope, providers, remuneration, complaints — before advice is given.

Every New Zealand insurer writes the complete guide to life insurance 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.

• A specialist risk adviser compares wordings, not just prices, and knows current underwriting appetite.
• They can arrange cover after settlement without the deadline distorting the decisions.
• They can review cover arranged at settlement and tell you honestly whether it is competitive.
• They carry a documented duty when recommending you replace existing cover, which protects you in either direction.

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.