Life insurance for over 65s

The insurance question at 65 is not about income. It is about what has to be paid in the weeks and months after a death, and whether the person left behind can pay it without selling something. That is what advisers mean by estate liquidity, and it is a more common problem than people expect in a country where most household wealth sits in a house.

There is a second, quieter change that couples rarely plan for. New Zealand Superannuation is paid at a couple rate while both partners are alive and at a single rate afterwards. The household loses a payment permanently at the same time as it acquires funeral costs and, often, a need to adjust the house. A modest life sum insured on each partner covers that transition.

The third factor is that some assets are illiquid and some are not divisible. If most of your wealth is a house, or a share of a family business, or a farm, then leaving it fairly to more than one child usually requires either a sale or a lump of cash from somewhere else. Life insurance is the cheapest way to create the second option.

Sizing it to a purpose

1. 1Add up what would fall due: funeral costs, any remaining mortgage or debt, tax on final matters, legal and probate costs.
2. 2Add the gap between the couple and single rates of NZ Super for the years your partner is likely to outlive you, if that gap matters to them.
3. 3Add anything needed to equalise an inheritance where one child will receive a house, a farm or a business.
4. 4Insure that total, not a round number. It is usually smaller than people fear and easier to justify to an underwriter.

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

• The maximum entry age of each insurer you are considering, which differs and is not always published clearly.
• The expiry age of any existing policy, and whether it ends or converts to stepped at that point.
• Whether trauma or TPD cover attached to your life policy reduces at 65 or 70 without any action from you.
• Whether your KiwiSaver balance is enough to cover final costs — it is paid to your estate and may take time to release.
• Whether the estate would need probate before funds are released, and how long that typically takes.
• Whether a policy with limited health questions carries a stand-down period during which only accidental death is covered.

Every New Zealand insurer writes cover after 65 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 are currently accepting applications at your age and which will decline before you waste an application.
• Sizing cover to defined estate costs so the premium is proportionate and defensible.
• Deciding whether to keep, reduce or release an existing policy — sometimes releasing is right, but rarely without analysis.
• Managing an underwriting process that at this age will look closely at your full medical history.

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.