Life insurance for couples without children

Couples without children get sold the same products as couples with them, sized the same way, and it usually does not fit. Life insurance exists to replace what your death would take away from someone else. If nobody depends on your income, the honest sum insured may be much smaller than a standard needs calculator produces — enough to clear joint debt and cover final expenses, rather than a multiple of your salary.

That is not the same as needing nothing. The joint mortgage is the pressure point. Two incomes were used to qualify for the loan, and a lender does not reduce the balance because one borrower has died. The survivor either services the whole thing alone, refinances, or sells the house in the worst year of their life. Cover sized to the debt, on each life, removes that choice from the equation.

The bigger exposure, though, is illness. In your thirties and forties you are far more likely to be off work for months than to die, and a household running two incomes and a matching mortgage has little slack. Income protection and trauma cover are what answer that, and they are the products couples without children most often skip.

1. 1Work out what the survivor’s position would be on one income: mortgage, rates, insurance, running costs.
2. 2Cover the gap, not your salary. If one income comfortably services the loan, you may need far less life cover than you think.
3. 3Then insure the incomes. Income protection for both, with waiting periods matched to your savings.
4. 4Add trauma cover sized to a year of household costs, so a diagnosis does not mean working through treatment.
5. 5Revisit the whole plan if children, a business or a dependent parent enter the picture — the answer changes completely.

The argument for buying young anyway

There is one good reason to hold life cover before you need it: insurability. Premiums are set by age and health at the time you apply, and a policy taken out at 30 keeps that underwriting for as long as you hold it. A diagnosis at 38 does not change the terms of cover you already own — but it can make new cover expensive or unobtainable. If children are likely, a modest policy now is cheap optionality.

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

• Whether you hold the house as joint tenants or tenants in common — it decides whether the property passes automatically to the survivor.
• Whether the mortgage is serviceable on one income at current rates, not at the rate you fixed at.
• Whether either of you has a student loan, a personal guarantee on a business loan, or a family loan.
• Whether employer-provided cover exists, what it covers, and that it ends when the job does.
• Whether income protection is agreed value or indemnity if one of you is self-employed or on variable pay.
• A special events benefit, so you can increase cover if a child arrives without new health questions.

Every New Zealand insurer writes cover for a two-income household 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.

• Being willing to recommend less cover than a calculator suggests, and documenting why.
• Sizing life cover against a real one-income budget rather than a salary multiple.
• Comparing income protection wordings, where the differences between insurers are much larger than the price differences.
• Setting the plan up so it can scale if your circumstances change, rather than needing to be rebuilt.

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.