Life insurance for rainbow families

The legal groundwork in New Zealand is comparatively good. Civil unions and same-sex marriage are recognised, de facto relationships attract the same relationship property rules regardless of the partners’ genders, and adoption is available. Insurance sits on top of that framework and generally behaves the same way it does for any other family.

The complications are practical. In families formed through donor conception, surrogacy or a previous relationship, the legal parent may not be the person doing the parenting, or a second parent may need a formal adoption to secure their status. If parentage is not settled, the default rules that decide who inherits and who has standing to act after a death may not produce the outcome the family expects.

Insurance is a useful tool here precisely because it does not have to follow the default rules. A policy can be owned by a specific person and paid directly to a nominated beneficiary, outside the estate. That makes it one of the cleanest ways to ensure a partner or a child is provided for without depending on how a court would characterise the relationship afterwards.

1. 1Sort the legal position first. If a second-parent adoption or a parenting order is needed, that is a lawyer’s job and it should not wait.
2. 2Make sure both partners hold their own cover, owned in a way that does not rely on the estate.
3. 3Nominate beneficiaries explicitly rather than relying on a will, so payment does not wait on probate or on any challenge.
4. 4Where children are involved and parentage is complex, consider trust ownership so trustees can apply the money for them.
5. 5Make wills that name a testamentary guardian and reflect the family as it actually is.
6. 6Keep the paperwork current after any name change, marriage, civil union or adoption.

On underwriting

Insurers assess medical history, occupation, pastimes, smoking status and family history. They do not rate premiums on sexual orientation or gender identity. Where an application encounters difficulty it is normally because of a specific health disclosure, and how those disclosures are treated differs between companies more than most people realise.

If you take preventive medication, have a managed condition, or hold a mental health history, the outcome can range from standard terms at one insurer to an exclusion at another. That variation is the reason to apply through someone who quotes several insurers and knows their current appetite, rather than applying directly to one and accepting whatever comes back.

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

• Whether both parents are legal parents, and what steps would secure that if not.
• Whether beneficiary nominations name your partner, and whether the insurer treats them as binding.
• Whether policies still carry a former name or details that no longer match your identification.
• Whether a will exists and appoints a testamentary guardian for children.
• Whether cover is owned personally, cross-owned or trust-owned, and which suits your family’s legal position.
• Whether an application is being submitted to an insurer whose current appetite fits your health history.

Every New Zealand insurer writes cover for rainbow families 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 assess particular health disclosures most fairly, which is live market knowledge.
• Structuring ownership and nominations so a payout does not depend on how a relationship or parentage is later characterised.
• Coordinating with a lawyer where adoption, surrogacy or a parenting order is involved.
• Handling an application discreetly and pressing for a proper explanation where terms are offered that seem unjustified.

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.