Westpac Life: what to compare

Westpac Life sells life and related cover under a bank brand in New Zealand. As with bank-branded life cover generally, the licensed insurer underwriting the policy is typically a separate company from the bank itself, so the first question is who carries the risk and assesses claims. Ask for that in writing.

The second structural feature is more important than most people realise. A bank branch or mobile mortgage manager can only offer you the product their institution distributes. That is one insurer, one wording, one underwriting appetite. It is not a comparison, and it is not presented as one — but because it arrives inside a conversation about your mortgage, it often feels like the sensible default rather than one of eight available options.

The third is timing. Bank cover is typically offered at the point of a lending application, when you are focused on settlement dates, you have already answered a hundred questions, and declining anything feels like introducing friction into a deal you want done. That is a poor environment for evaluating a thirty-year contract.

None of this means bank-branded cover is bad. It means it should be evaluated on the same terms as anything else, and the sales context makes that harder. Slow it down.

1. 1Establish that insurance is not a condition of the lending. In New Zealand a lender can require you to insure the property, but life, trauma and income cover on you personally are your choice. Ask directly, and get the answer in writing if there is any ambiguity.
2. 2Ask which licensed insurer underwrites the policy and which dispute resolution scheme it belongs to.
3. 3Ask whether the cover is tied to the loan — whether it reduces as the loan reduces, whether it ends if you refinance elsewhere, and whether the bank is the policy owner or beneficiary.
4. 4Ask whether the application is fully underwritten or simplified, and whether a general pre-existing condition exclusion applies.
5. 5Take the wording away and compare it against two or three other insurers before you commit. A week’s delay costs nothing; a narrower definition costs you at claim.

The specific things to compare

• Terminal illness definition — 12 months’ or 24 months’ certified life expectancy.
• Trauma definitions for the conditions that drive most claims, and whether severity-based partial payments exist.
• TPD definition, own-occupation availability, and the age at which the definition converts.
• Income protection offsets, waiting and benefit periods, and whether agreed value is available.
• Premium structure: is level available, to what age, and what happens at expiry?
• Whether the policy is portable if you move your mortgage to another lender.

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

• Whether the policy is owned by you and pays your nominated beneficiary, or is tied to the lender.
• Whether cover continues unchanged if you refinance with a different bank.
• Whether the sum insured reduces automatically with the loan balance, and whether that is what you want.
• Whether a general pre-existing condition exclusion applies, and how far back it looks.
• Whether the same underwriter is available to you through an adviser, possibly on a broader wording.

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.

• A bank offers one insurer. An adviser quotes the panel, including in many cases the same underwriter on a fuller wording.
• An adviser is not sitting on the other side of your lending decision, which removes an obvious conflict.
• An adviser structures ownership and beneficiary nominations so the money reaches the people it is meant for.
• Where cover is tied to a loan, an adviser can arrange portable cover that survives a refinance.
• An adviser reviews the cover when the mortgage changes, which is when most bank-arranged cover quietly stops matching the need.

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.