Life insurance isn’t something you buy because you’re bored on a Sunday afternoon. You buy it because you know that if something happened tomorrow, the people who depend on you still need the rent paid, the power on, the school lunches made, and the mortgage ticking along.
But choosing the right life insurance? That’s where most New Zealanders get stuck. There are quotes flashing at you online, promotions from banks, ads on social media, and each one promises to be “simple, affordable, easy”.
Except life isn’t simple. And protecting your loved ones definitely isn’t something you want to “wing”. So here are the six factors every Kiwi should consider before signing up for life cover.
How much cover your family genuinely needs?
Before you look at products or providers, start with a simple question: “If I weren’t here tomorrow, what would my family still need to pay for?”
Think about:
- Mortgage or rent
- Groceries, petrol, utilities
- Kids’ school fees, uniforms, sports
- Existing loans and debts
- Funeral and estate costs
Most people severely underestimate this. Your cover isn’t just a “big number”, it’s the financial bridge between tragedy and stability. Too little cover, and your family could still struggle financially. Too much, and you may end up paying higher premiums than you need to.
Every situation is different. A dual-income couple with no kids might need far less than a family with one income and a $700k mortgage. The number has to match your reality, not a template. A good life insurance adviser in NZ will help you walk through your numbers and goals.
The type of life cover and what you want it to do
When people say “life insurance,” they often mean the basic lump-sum life cover. But most Kiwi insurers also offer add-on benefits that completely change how your policy works depending on your goals.
A good policy can include:
- Life Cover: Pays a lump sum if you die or are diagnosed as terminal.
- Trauma/Critical Illness Cover: Pays out for conditions like cancer, heart attack, stroke.
- Total & Permanent Disability (TPD): Pays out if you’re permanently unable to work.
- Income or Mortgage Protection: Supports your financial commitments if you can’t work due to illness or injury.
You don’t necessarily need everything, but you do need the right combination for your situation.
- Young family + big mortgage? Life + mortgage/ income cover is often a strong combo.
- Self-employed? Income protection and trauma cover can be crucial.
- Blended family or older kids? You might prioritise lump-sum life cover for estate planning
Choosing the right mix matters more than choosing the right logo.
How your premiums work now and over the next 20 years
Premiums are not “set and forget”. These things are variable and can change rapidly if you’re not aware of them. In New Zealand, your primary options will usually be:
- Stepped premiums: Today’s cheaper, but by the end of each year, it is going to be more expensive
- Level premiums: Upfront cost is higher, but it is more stable in the long run.
Key questions to ask:
- What is the cost of the premium 5, 10, 15 years later, not only today?
- Would it be possible to cut cover or modify benefits if the expense gets too high?
- Can I change from stepped to level in the future (or vice versa)?
The right premium structure can save your future self thousands and protect your family from ever having to cancel a policy because it becomes unaffordable.
Your age, health, lifestyle, and how insurers assess you
Life insurance isn’t just about the policy; it’s also about you, your age, health, and lifestyle choices. Insurers look at:
- Age
- Medical history
- Family health history
- Occupation
- Smoking/alcohol habits
- High-risk hobbies
- Current health and BMI
These details influence:
- Whether you can get cover
- What your premiums are
- Whether you have exclusions (e.g., no cover for certain conditions or activities)
And here’s the part people often miss: Switching insurers later can sometimes remove cover for pre-existing conditions. Something you were covered for today may not be covered tomorrow if you hop to a cheaper insurer.
`So never switch purely for price without an adviser checking what you stand to lose.
Benefits, exclusions, and the fine print
Two policies can look identical in price and cover amount until claim time reveals the truth. The fine print determines:
- What counts as a terminal illness?
- What conditions does a trauma cover actually include?
- What’s excluded due to personal history, occupation, or lifestyle?
- Whether payouts happen quickly (e.g., funeral advancement).
- Whether inflation adjustments are automatic.
- Whether you can increase cover later without medical tests (“special events” options).
- Flexibility to switch from stepped to level premiums.
This is exactly where an insurance adviser earns their keep: translating the fine print into normal language and pointing out where one insurer’s wording is materially stronger or more flexible than another’s
So when choosing a policy, don’t just ask “what does it cost?”, ask “what does it do when I need it most?”
The insurer (and adviser) standing behind the policy
When choosing life insurance in NZ, you’re picking more than a cover amount; you’re picking who handles your family’s biggest financial moment. Look for:
- Financial strength ratings (A, A+, AA, depending on the insurer)
- Claims acceptance rates
- Customer reputation
- Product flexibility
- Local support
Independent insurance advisers in NZ work with multiple insurers (such as Partners Life, Asteron Life, Fidelity Life, AIA, Chubb Life, nib, and others). Their job is to:
- Help you clarify your needs
- Check out different providers’ policies
- Describe concessions in easy-to-understand language
- Support you at claim time, not just at signup
That assistance could be invaluable at the time when you are experiencing loss, sickness, or major life stress, essentially being a major support when you do not have the capacity to deal with and resort to paperwork.
Quick FAQs about choosing life insurance in NZ
Q. Is it better to get life insurance online or through an adviser?
Ans : Online may be quick and easy, but your choices are limited to a handful. An insurance adviser in NZ can compare multiple insurers, structure your cover properly, and help at claim time, usually at no extra cost to you.
Q. When’s the best time to get life insurance?
Ans : In general, the younger and healthier one is, the lower the premiums and the quicker the coverage approval. Delay seeking coverage until you have health problems or a large mortgage, and you may find it more costly or difficult to obtain the protection you desire.
Q. How do I know if I’ve got enough cover?
Ans : After considering your mortgage and other liabilities, add several years of your household expenses, plus any big ambitions like children's education. Specialists and calculators can assist, but a discussion with a consultant will lead you to a specific figure that fits your circumstances.
Final Thoughts
A life insurance policy is not for you; it is for the people who will suffer the most from your absence. And because of that, selecting the adequate insurance cover should take more than a quick ad click or just the cheapest number from a comparison website.
If you are:
- Not clear about the exact amount of cover you need
- Overloaded with the quotes you are comparing
- Concerned that you are paying for the wrong thing (or not enough)
That’s exactly where a good adviser steps in. You do not have to be completely informed. It is enough that you begin with the right questions and the right team.
Ready to get covered?
Talk to NZ Insurances today for free, no-obligation advice, comparisons across NZ’s leading life insurers, and a policy that genuinely fits your future.
