Waiver of premium

The scenario waiver of premium is built for is unglamorous and common. You are off work for eight months with a serious illness or a bad injury. Income has stopped or dropped sharply. The mortgage, the power bill and the groceries come first, and the insurance premium — for cover you may be about to claim on — is the discretionary payment that gets missed. The policy lapses.

Waiver of premium removes that risk. Once you have been disabled for the waiting period, the insurer stops charging premiums and keeps every benefit in the plan fully in force. When you recover and return to work, premiums resume. Cover you might need for a trauma or TPD claim survives the period in which you were least able to pay for it.

It is priced as a small percentage of the plan premium, which makes it one of the better value additions on most New Zealand policies — the rider that protects all the others.

1. 1You become unable to work through illness or injury and notify the insurer.
2. 2The waiting period runs — typically three or six months of continuous disability, matching or set separately from any income protection waiting period.
3. 3Once the waiting period is satisfied, premiums are waived from that point, and some insurers refund premiums paid during the waiting period.
4. 4All benefits in the plan continue as normal. Indexation may continue too, depending on the wording.
5. 5The waiver continues while you meet the disability definition, up to a maximum period or age.
6. 6When you recover, premiums resume at the rate applying to your age at that time.

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

• The disability definition used for the waiver, and whether it matches the rest of your plan.
• The waiting period, and whether premiums paid during it are refunded once the claim is admitted.
• The maximum period the waiver runs for, and the age at which it ceases.
• Whether indexation increases continue during the waiver, and who pays for them.
• Whether the waiver covers the whole plan premium or only the life cover portion.
• Whether redundancy waiver is included, what it requires, and how long it lasts.

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.

• Waiver definitions and waiting periods vary; aligning them with an income protection waiting period is a common adviser fix.
• On some plans waiver applies to the entire premium including riders, on others only to part — worth confirming in writing.
• Self-employed clients benefit most from waiver, because there is no employer sick leave to bridge the gap.
• Where the waiver is not automatically included, an adviser will usually recommend adding it before increasing the sum insured.

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.