Life insurance for over 60s

The question changes in your sixties. It is no longer how much income needs replacing — it is what has to be paid for after you die, and by whom. That usually means any remaining mortgage, the cost of a funeral, tax or debts falling due in the estate, and enough for a surviving partner to stay in the house on a single set of superannuation payments.

Those are smaller numbers than a family in its thirties needs, and that is the good news, because cover at this age is expensive. A sum insured sized to a real, specific purpose is affordable in a way that a hangover from a policy bought in 1998 often is not.

The bad news is availability. Every product has a maximum entry age and they differ: life cover is generally available latest, trauma and TPD close earlier, and income protection makes little sense once the benefit period would end within a few years. If you are contemplating new cover, the window is narrowing and each birthday closes it further.

The expiry cliff

Level policies are level to a chosen age, and what happens at that age is set out in the wording. Some simply end. Others convert to stepped premiums calculated at your attained age, which at 65 or 70 can be a very large number arriving with little warning. If you hold level cover, find out now which of those two your policy does, and diarise the date.

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

• The maximum entry age for each product you are considering, which varies by insurer and changes.
• Whether the insurer requires medical evidence at this age even for modest sums insured, and what that involves.
• Whether an income protection policy will still pay a meaningful benefit period given your intended retirement date.
• Whether the remaining mortgage will be cleared before or after your cover expires.
• Whether a trauma policy includes a buy-back allowing life cover to be reinstated after a trauma claim.
• Whether funeral cover, which is easier to obtain, is being suggested as a substitute for cover you could still qualify for properly.

Every New Zealand insurer writes cover in your sixties 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.

• Knowing which insurers currently accept new applications at your age and on what terms, which is not published in a usable form.
• Working out whether an existing policy should be kept, reduced or restructured, and being willing to say keep it.
• Modelling the cost of holding cover to 75 or 80 so the decision is made on total cost rather than this year’s premium.
• Handling underwriting at an age where the insurer will look closely at everything in your medical record.

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.