Accidental death cover

Accidental death cover is a narrow contract. It pays the sum insured if you die as a result of an accident, which policies typically define as a sudden, violent, external and visible event, and usually require death to occur within a defined window after that event — often 90 or 180 days. Everything else is outside the policy.

The critical point is what “everything else” includes. Cancer, heart disease, stroke, respiratory disease and every other illness are excluded. So, on most wordings, are deaths where a medical event caused the accident — a fatal crash triggered by a heart attack can be assessed as a death from illness rather than an accident.

Accidental death is sold with minimal health questions and often no medical evidence at all, which is exactly why it is marketed to people who fear being declined for ordinary life cover. That fear is usually overstated. Very few applicants are declined outright; loadings and exclusions are far more common outcomes, and a loaded life policy that covers illness is worth more than a clean policy that does not.

There are real cases for it. They are narrower than the marketing suggests.

• You have applied for fully underwritten life cover and been declined by more than one insurer.
• You are in a deferral period — an insurer has said to come back in twelve or twenty-four months — and want something in place meanwhile.
• You need cover immediately for a settlement date and the underwriting will not be finished in time, as a stopgap only.
• It is included at no extra cost as an interim accident benefit while your application is being assessed.
• You want a small top-up over full cover for a specific accident-heavy risk, and you have priced it properly.

ACC also matters here. New Zealand’s accident compensation scheme already provides survivor’s grants and weekly compensation to the dependants of someone who dies from an accident, which reduces — though does not remove — the gap accidental death cover is sold to fill. There is no equivalent scheme for illness, which is precisely the risk this product excludes.

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

• The definition of accident, and whether death must occur within a set number of days of the event.
• Whether death caused by a medical event that led to an accident is covered or excluded.
• Exclusions for alcohol and drugs, which commonly apply at a stated blood alcohol level rather than requiring fault.
• Exclusions for aviation other than as a fare-paying passenger, motorsport, diving and other listed pursuits.
• Maximum entry and expiry ages, which are often lower than on fully underwritten cover.
• Whether the policy is guaranteed renewable or can be cancelled by the insurer at renewal.

Every New Zealand insurer writes life insurance in new zealand 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 declined by one insurer does not mean being declined by all — appetites for particular histories differ substantially.
• An adviser can often obtain a loaded or exclusion-based offer of full life cover where a direct application produced a decline.
• Where a deferral applies, an adviser can diarise the reapplication date so cover is upgraded as soon as it is available.
• Interim accident cover during underwriting is standard with most insurers and should be confirmed in writing when you apply.

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.