Life insurance for Australians living here

The insurance most Australians hold is not a policy they chose. It is default cover inside a superannuation fund — life and total and permanent disablement, sometimes income protection — deducted from the balance without much thought. It works well while you are contributing. It behaves unpredictably once you leave the country and the contributions stop.

Australian rules have moved steadily towards cancelling insurance on inactive superannuation accounts, and a fund with no contributions for a sustained period is the definition of inactive. An Australian who moves to New Zealand, joins KiwiSaver and forgets the old fund can find, years later, that the cover ended quietly and the account was eroded by fees in the meantime.

The second surprise is ACC. Australia has no equivalent, and Australians arriving here often either over-insure the accident risk or assume ACC covers illness as well. Neither is right. ACC handles injury comprehensively and illness not at all, which changes the shape of what you should buy here.

Insuring in one country or two

Holding cover in both countries is not automatically wasteful, particularly during a period when you are unsure where you will settle. What matters is that each policy is understood: which currency it pays in, whether it covers you as a resident of the other country, and who would have to make the claim from where. A policy that pays in Australian dollars to an Australian estate may be exactly right or entirely wrong depending on where your family will be.

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

• Whether your Australian super fund has already cancelled insurance for inactivity, which happens without any obvious notice.
• Whether the Australian cover would pay a claim arising in New Zealand, and how the proceeds reach your family.
• Whether trans-Tasman retirement savings transfer arrangements are relevant to you, and what they do to any attached insurance.
• Whether your New Zealand employer offers group cover, which is far less common here than default super cover in Australia.
• Whether income protection here is sized correctly given ACC covers the accident half of the risk.
• Whether tax treatment of a payout differs depending on which country the policy is written in.

Every New Zealand insurer writes trans-Tasman 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.

• Establishing what Australian cover actually remains in force, which usually requires contacting the fund directly.
• Building a New Zealand plan that complements rather than duplicates what you already hold.
• Explaining how ACC changes the shape of a plan compared with Australian practice.
• Sequencing so nothing is cancelled before its replacement is in force.

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.