Special events and future insurability

A special events increase — some insurers call it future insurability or a guaranteed insurability option — is a promise made at the start of the policy: if a listed life event happens, you may increase your cover by a stated amount without providing any medical evidence. You still pay for the extra cover at your then-current age, but the insurer does not get to reassess your health.

It is valuable precisely because health rarely stays still. The person taking out cover at 30 is unlikely to be the same underwriting risk at 40, and the events that create the need for more cover — a bigger mortgage, a second child, a promotion — tend to arrive at the same time as the first health complications.

It is also routinely wasted, because the option is tied to a deadline nobody diarises. Settlement day comes and goes, the family moves house, and three months later the window has closed. This is the single most common piece of value that policyholders leave on the table.

Two limits usually apply. There is a maximum increase per event — often expressed as a percentage of the original sum insured or a dollar cap, whichever is lower — and a lifetime maximum across all events. There is also typically an age limit, after which the option no longer operates at all.

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

• The exact list of qualifying events, which is not standard between insurers.
• The number of days you have after the event to exercise the option.
• The per-event cap and the lifetime cap on increases.
• The age at which the benefit ceases to be available.
• Whether existing loadings or exclusions carry across to the increase, which they usually do.
• Whether the option is available on trauma and TPD benefits or only on life cover.

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.

• Event lists, windows and caps differ enough that this benefit is worth weighting when choosing an insurer, particularly for people in their twenties and thirties.
• An adviser who reviews annually will catch events you did not think to mention — a mortgage top-up is easy to forget.
• Where health has changed, an adviser can compare exercising the option against a fresh application, since the option avoids underwriting but the fresh application might get better pricing.
• Business events, such as taking on debt or increasing a shareholding, sometimes qualify under a separate business increase option.

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.