The bereavement benefit

When someone dies, money is needed almost immediately and the estate is usually the last place it comes from. Bank accounts in the deceased’s sole name are frozen, probate can take weeks or months, and the funeral director’s account is due long before either resolves. The bereavement benefit exists to close that gap.

Mechanically it is simple. The insurer pays a fixed amount — set out in the policy schedule — on receiving proof of death, without waiting for the full claim assessment. The balance of the sum insured follows once the claim has been considered in the normal way, and the advance is deducted from it.

It is worth knowing the amount before you need it, because families frequently do not know the benefit exists. Advisers do, which is one of the practical reasons to have someone else holding the policy file.

1. 1Notify the insurer or your adviser as soon as practical. A phone call starts the file.
2. 2Provide the death certificate, or an interim certificate from the funeral director where the formal certificate has not been issued.
3. 3Provide the funeral director’s invoice or estimate if the insurer pays the advance to the funeral home directly.
4. 4Confirm who the policy owner and nominated beneficiary are — the advance is normally paid to them or to the estate.
5. 5Keep the full claim moving in parallel. The advance does not replace the claim; it buys time.

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

• The exact amount payable, which varies significantly between insurers and sometimes with the sum insured.
• Whether it is paid to the beneficiary, the estate, or directly to the funeral director.
• Whether the benefit is available in the first months of the policy or subject to an initial waiting period.
• Whether it applies to trauma or TPD-only policies, which frequently carry no death benefit at all.
• How the advance interacts with a terminal illness payment already made.
• Whether an interim death certificate is accepted.

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.

• Bereavement advance amounts are a straightforward point of comparison between otherwise similar policies.
• Some insurers pay funeral costs directly to the funeral home, which removes a cash-flow problem entirely.
• An adviser holding the file can start the claim with a phone call, at a point when a family should not be reading policy documents.
• Where cover sits in a trust or an estate, an adviser can confirm in advance who is entitled to receive the advance and avoid a delay.

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.