Instant life insurance: quote yes, cover no

There is a real product story behind the word instant, and it is worth separating from the marketing. What can genuinely happen instantly is a price. Rate tables are published to insurers’ own calculators and to adviser software, so a figure against your age, sex, smoking status and sum insured comes back immediately.

What cannot happen instantly is the insurer agreeing to carry your risk. That requires someone — or an automated underwriting engine — to look at your disclosure and decide whether to accept, load, exclude, defer or decline. On a clean application with no health history and a modest sum insured, some New Zealand insurers make that decision very quickly through straight-through processing. On anything requiring a GP report, weeks is normal.

Anyone who tells you cover is instant is either describing an automated decision on a very narrow product, or describing something that is not what you think. The safe assumption is that you are not covered until you have written confirmation that the policy is in force.

Most New Zealand insurers offer interim accidental death cover while an application is being assessed. It is a real benefit and it is worth knowing you have it, but it is narrower than the policy you have applied for.

• It usually starts when the insurer receives your completed application, not when you first make an enquiry.
• It normally covers accidental death only — not death from illness, which is the more likely event.
• It is capped, often well below the sum insured you have applied for, and the cap differs by insurer.
• It runs for a limited period, commonly a set number of days, and ends when the insurer makes its decision.
• It ends if you withdraw the application or the insurer declines it.
• The terms are set out in the insurer’s interim cover certificate. Ask for it and read it.

What actually decides how fast you get covered

1. 1How completely you fill in the application. Ambiguity generates follow-up questions and follow-up questions cost days.
2. 2Whether the sum insured sits under the insurer’s evidence limits. Under the limit, no tests; over it, add a week or two.
3. 3Whether your history requires a GP report. This is the biggest single variable, and practice turnaround is not something an insurer can hurry.
4. 4How quickly you complete a tele-underwriting interview when it is offered.
5. 5Whether the adviser has picked an insurer whose appetite suits your history, so the file does not have to be re-shopped.

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

• “Instant” in an advertisement usually describes the quote, the decision engine or the application, not the cover.
• Interim accidental death cover is not life cover. Death from illness during underwriting is generally not paid.
• Cover starts when the insurer confirms it in writing. Verbal reassurance is not a contract.
• Fast products are often narrow products, with fewer questions at application and more scrutiny at claim.
• A cheap fast decision that comes with an exclusion may be worse than a slower application to a better-fitting insurer.
• Do not cancel any existing cover while a new application is being assessed.

Every New Zealand insurer writes life insurance in new zealand 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.

• Advisers know which insurers currently offer straight-through underwriting for which profiles, which is where genuine speed comes from.
• They can chase a GP report and an underwriter, which is most of the practical delay in any application.
• They will confirm in writing when interim cover starts, what it covers, and when the policy itself is in force.
• They can sequence an application so an existing policy stays in place until the replacement is issued.

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.