Southern Cross Life & Living: what to compare

Southern Cross is one of the best-known insurance brands in New Zealand, built on health cover. Southern Cross Life & Living Insurance is the life and living cover sold under that brand, and it is underwritten by Chubb Life. That arrangement is entirely ordinary — brand and underwriter are separated all over the New Zealand market — but it has two consequences that matter for a buyer.

The first is diversification. If you were putting Southern Cross Life and Chubb Life side by side as alternatives, you were not comparing independent insurers. Whatever view you take of the underwriter applies to both.

The second is expectation. People buy a brand they trust for a reason, and there is nothing wrong with that. But the claims assessment, the underwriting appetite and the policy wording that decide what you get are the underwriter’s, not the brand’s. Ask your questions of the entity that will be assessing your claim.

Start with the structural questions, then run the standard comparison dimensions.

1. 1Confirm in writing which licensed insurer underwrites the policy you are being offered, and which dispute resolution scheme that insurer belongs to.
2. 2Check whether that underwriter appears elsewhere on your shortlist under another name. If it does, you have fewer real options than you thought.
3. 3Establish whether the life and living cover is fully underwritten or simplified. Simplified applications are faster and usually carry broader pre-existing condition exclusions.
4. 4Check the maximum sums insured available. Products distributed alongside health cover sometimes cap lower than a fully advised product.
5. 5Ask whether any member or multi-policy discount is conditional on holding the health policy, and what happens if you leave it.

Then the standard dimensions

• Premium structure: is level available, to which expiry ages, and what happens at expiry?
• Terminal illness: 12 months’ or 24 months’ certified life expectancy?
• Trauma: definitions for the conditions that drive most claims, severity-based partial payments, and buy-back availability.
• TPD: own-occupation availability by occupation class, and the age the definition converts.
• Income protection: agreed value availability, waiting and benefit periods, ACC offsets, booster benefits.
• Future insurability: triggers, per-event limits and the age the benefit ends.
• Pass-back, evidence limits, policy fee structure and multi-benefit discounts.

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

• That the brand you are dealing with and the insurer carrying the risk are different companies, with different claims processes.
• Whether a discount is tied to holding the health policy, which can lock you into a product you have outgrown.
• Whether the risk cover is simplified or fully underwritten, and how pre-existing conditions are treated in each case.
• That health claims history and life underwriting are separate — disclosing to one is not disclosing to the other.
• Whether the maximum sum insured available is enough for what you are actually insuring.

Every New Zealand insurer writes new zealand life insurers 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.

• An adviser will tell you when two brands on a shortlist share an underwriter, which removes an option you thought you had.
• An adviser can price the health policy and the risk cover separately across the market and show what the bundle is really worth.
• Where a simplified product would exclude a condition, an adviser can test whether a fully underwritten application elsewhere covers it.
• An adviser reads the definitions that decide a claim rather than the benefit names in a brochure.
• If a claim is disputed, an adviser deals with the underwriter, which is the entity that matters.

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.