Life insurance in Wellington

The useful thing to understand about Wellington is that the work is mostly indoors and mostly at a desk. Policy, law, accounting, consulting, film and technology sit at the low-risk end of every insurer’s occupation table. Income protection is therefore cheaper here than for the same income earned on a building site, and own-occupation TPD definitions are usually offered rather than argued over.

That advantage has a shadow. ACC pays for injury, not illness. An office worker is far less likely to be injured than a roofer and just as likely to be diagnosed with cancer, to have a stroke, or to be signed off with a serious mental health condition. Wellington’s risk profile is weighted towards the events ACC does not touch — which is the whole argument for income protection here.

The third feature is employment concentration. Many households have at least one income tied to the public sector or to something that depends on it, and restructures move through this city in waves. Insurance does not solve redundancy. But it changes how you think about affordability: cover you cannot pay for during six months out of work is cover you will cancel at the worst possible time.

Wellington households tend to be reasonably covered on life and underdone on the disability side, which is the reverse of where the risk actually sits for people who work in offices.

1. 1Income protection, with the wording read closely — agreed value where it is still offered, otherwise a hard look at how loss of earnings is proved.
2. 2Trauma cover for illnesses that stop work without meeting a total disability definition.
3. 3Life cover to the mortgage plus children’s costs, on both earners.
4. 4Health insurance, which here mostly buys diagnostic speed — the specialist appointment and the scan, not only the surgery.
5. 5A hard look at employer cover, which usually ends the day the job does.

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

• Group schemes that end on your last day, leaving you applying at an older age with a changed health history.
• Two-year benefit periods chosen because they looked cheaper, when the illnesses that stop office workers rarely resolve in two years.
• Mental health exclusions, which are common and more negotiable than most people realise.
• Contractors and consultants — a large Wellington group — whose cover must be sized on financials, not on one good year.

Wellingtonians are used to where they live showing up on an insurance bill — the house premium says so every year, because the building sits on a fault line and cannot be moved. Life insurance works from the other end. It underwrites a person, and mortality is driven by age, health, family history, smoking and occupation.

So there is no Wellington rating and no seismic loading on a life policy. If you moved to Nelson tomorrow your existing cover would not change price, and a new application there would be priced identically.

Wellington is a compact city with plenty of advisers in it, so a face-to-face meeting is easy to arrange. Working with someone in another city is equally easy, because video advice with electronic signing is now the normal way these conversations happen.

Apply the capability test, not the proximity test. An adviser who can quote nine insurers from Palmerston North beats one down the corridor who can quote two.

Every New Zealand insurer writes life, trauma, income protection and health cover 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.

• Insurers differ on how they verify income for contractors, which matters more here than salaried employment does.
• Mental health exclusions and loadings are among the most insurer-specific calls in the market — one insurer’s blanket exclusion is another’s time-limited review.
• Where employer cover exists, a personal policy can be sized to top it up rather than duplicate it.
• For self-employed consultants, a business expenses component keeps overheads from eating the benefit.

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.