Life insurance when you are single

The industry’s default answer is that everybody needs life insurance. For a single person with no children, no shared debt and no financial dependants, that answer does not survive contact with the facts. If you die, your assets are used to pay your debts, and whatever is left goes to whoever your will names. There is no household left behind that loses its standard of living, which is the thing life cover is designed to protect.

Where that reasoning breaks down is guarantees. If your parents went on your mortgage, if a family member co-signed a business loan, or if you own property with a sibling, someone else is standing behind your debt. Their exposure is a legitimate reason to hold cover, sized to what they would be left carrying rather than to a multiple of your income.

The far more relevant risk is that you stop earning without dying. Living alone means the rent or mortgage, the power and the food all rest on one income with no fallback. A six-month absence from work would empty most people’s savings and then start on their credit. That is the exposure worth insuring, and it is not solved by life cover.

Read down that table and the honest conclusion for many single people is that a modest amount of cover — enough for funeral costs and to clear anything that would fall on a guarantor — is all the life insurance the situation calls for.

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

• Whether anyone has guaranteed a loan for you, and what they would be left with.
• Whether your employer provides life or income cover, and that it stops when you leave.
• Whether your KiwiSaver balance would be enough to cover your final costs — it is paid to your estate, not to a nominated person.
• Income protection waiting periods against your actual savings, which for a single person is the whole safety net.
• Whether a policy includes a special events benefit letting you increase cover when you buy a house or have a child.
• That trauma cover pays you, not a beneficiary — it is one of the few products that is genuinely for the single person themselves.

Every New Zealand insurer writes personal risk cover for a single person 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.

• Saying plainly when life cover is not needed, and pointing the budget at the cover that is.
• Sizing income protection against a household of one, where a long waiting period is far riskier.
• Checking whether any family guarantee exists — people frequently forget they were given one.
• Choosing a policy with strong future insurability options, so the cover can grow with your life without new underwriting.

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.