Life insurance and relationship property

New Zealand relationship property law deals with how property is divided when a marriage, civil union or qualifying de facto relationship ends. Insurance policies are property, and like other property their treatment depends on when and how they were acquired, what they are worth, and what the parties agree.

Most term life, trauma and TPD policies have no surrender value, so there is often little capital value to divide. That does not make them irrelevant. What matters more practically is control and entitlement: who owns each policy, who is nominated on it, who is paying the premiums, and what happens to a benefit paid after separation but before matters are finalised.

Policies with an investment or savings component — older whole of life and endowment contracts — are a different matter, because they do carry value that can be divided. If either party holds one, it needs to be on the schedule of assets rather than treated as a bill.

1. 1List every policy: insurer, owner, life assured, beneficiary, premium and who pays it.
2. 2Update beneficiary nominations. Separation does not do this for you, and an ex-partner named on a policy stays named until you change the form.
3. 3Decide what happens to cross-owned cover. Leaving an ex-partner as owner of a policy on your life gives them control over whether it continues.
4. 4Work out who pays which premiums during the separation. Policies lapse quietly and cannot always be reinstated.
5. 5Consider whether cover is needed to secure ongoing obligations — child support, maintenance, or a share of a mortgage.
6. 6Review the will at the same time. Separation changes the estate picture as much as it changes the insurance picture.

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

• Whether a nomination still names an ex-partner. This is the most common oversight of all.
• Whether a policy with a surrender value has been disclosed in the asset schedule.
• Who is actually paying each premium, and whether that will continue.
• Whether a separation agreement requires cover to be maintained, and whether it says who owns it.
• Whether cross-owned policies should be assigned, replaced or left alone.
• Whether new cover is needed to secure support obligations for children.

Every New Zealand insurer writes life cover 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.

• An adviser can produce a clean schedule of every policy, owner, nomination and premium, which is exactly what a lawyer will ask for.
• They can arrange replacement cover before an existing cross-owned policy is unwound, so there is never a gap.
• They will flag policies with a surrender value that belong in the property schedule rather than the budget.
• They can size cover to secure ongoing obligations under a separation agreement.

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.