Consumer Life
Product overview
Life insurance
Save on life insurance premiums.
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If people depend on you for income or care, you need life insurance.
Choosing the right amount and buying from the right company can save you
a lot of money. We've looked at "term life" policies, and asked 21
companies to provide quotes for our 2 case studies.
Compare Life insurance
View allOnepath
Assurance Extra
Snapshot: The Onepath Assurance Extra policy insures people aged 10 to 70. How good are its premiums?
TSB
Bank Term Life Insurance
Snapshot: The TSB Bank Term Life Insurance policy insures people aged 18 to 70. How good are its premiums?
The Warehouse
Instant Life
Snapshot: The Warehouse Instant Life policy insures people aged 16 to 55. How good are its premiums?
Tower
Insurance Life 360
Snapshot: The Tower Insurance Life 360 policy insures people aged 16 to 75. How good are its premiums?
Pinnacle
Life
Snapshot: The Pinnacle Life policy insures people aged 20 to 59 or 16 to 75. How good are its premiums?
Partners
Life
Snapshot: The Partners Life policy insures people aged 10 to 70. How good are its premiums?
Fidelity
Life Assurance Life Cover
Snapshot: The Fidelity Life Assurance Life Cover policy insures people aged 16 to 75. How good are its premiums?
AIA
Life Cover
Snapshot: The AIA Life Cover policy insures people aged 16 to 69. How good are its premiums?
BNZ
Life LifeCare
Snapshot: The BNZ Life LifeCare policy insures people aged 16 to 79. How good are its premiums?
Kiwibank
Life & Living Insurance
Snapshot: The Kiwibank Life & Living Insurance policy insures people aged 18 to 70. How good are its premiums?
Cigna
LifeOne
Snapshot: The Cigna LifeOne policy insures people aged 16 to 69. How good are its premiums?
The Co-operative Bank
Life Plus
Snapshot: The Co-operative Bank Life Plus policy insures people aged 16 to 98. How good are its premiums?
Asteron
Life Smartlife
Snapshot: The Asteron Life Smartlife policy insures people aged 11 to 75. How good are its premiums?
ANZ
Lifestyle Insurance
Snapshot: The ANZ Lifestyle Insurance policy insures people aged 16 to 98. How good are its premiums?
ASB
Lifestyle Security Plan (Term Life Benefit)
Snapshot: The ASB Lifestyle Security Plan (Term Life Benefit) policy insures people aged 10 to 70. How good are its premiums?
Do you need it?
Most people with a family or debt need some life insurance – just in case the unthinkable happens.
At a minimum, life insurance should cover your debts, funeral expenses, full repayment of your mortgage (including any early-repayment fee), and your family's immediate living costs.As well, you should add in the amount required to replace a lost income, or pay for a caregiver, until the surviving family is no longer dependent on this.
For this type of “pure” life insurance, we recommend term
policies. Term life-insurance policies pay out the sum insured if you
die while the policy is in force. You buy the cover for the period that
you need it, which for most people is until their children are
independent and their home is mortgage free.
We don’t recommend whole-of-life or investment-type insurance policies for pure life insurance. Both these are commission-based products that combine life insurance with a savings plan; and because they’re commission-based, they’re likely to be more expensive. You’re better off getting the best term life insurance you can afford and then looking for the best savings or investment deals.
Who are your dependants?
Life insurance isn't just for financial dependency. Consider the ways that you contribute to your family, and what you'd need to compensate for the loss of that contribution. This includes caregiving and childcare as well as financial support. It could also include the support you give to elderly relatives.
We don’t recommend whole-of-life or investment-type insurance policies for pure life insurance. Both these are commission-based products that combine life insurance with a savings plan; and because they’re commission-based, they’re likely to be more expensive. You’re better off getting the best term life insurance you can afford and then looking for the best savings or investment deals.
Who are your dependants?
Life insurance isn't just for financial dependency. Consider the ways that you contribute to your family, and what you'd need to compensate for the loss of that contribution. This includes caregiving and childcare as well as financial support. It could also include the support you give to elderly relatives.
Assessing your risk
When they take you on, companies look at what sort of risk you are.
The premium you pay can be affected by your age, sex, occupation, lifestyle activities, and health factors such as body mass index (BMI) and medical history – and whether you smoke.Men pay a higher premium in their 20s because they have a higher risk of accidents then. Premiums also increase as you approach middle age.
Make sure you realise what you’re getting into when you sign
up. Depending on your circumstances, there could be policy exclusions or
a higher premium to cover risks that are not part of the policy’s
“standard” cover.
One insurer told us the number of applicants being refused life insurance on medical grounds was increasing but there are some products available which don’t require a medical. These tend to be more expensive and have limited cover.
Ask your adviser: Read the whole policy document carefully. If there is anything you don't understand, ask the company or your adviser to explain it.
One insurer told us the number of applicants being refused life insurance on medical grounds was increasing but there are some products available which don’t require a medical. These tend to be more expensive and have limited cover.
When you apply
Always provide the full info: When you apply you must answer all questions honestly and in full, particularly the questions about your medical history. If you don’t, the insurer may refuse to pay out later. Cover for pre-existing conditions varies, so it may be worth paying higher premiums to get suitable cover.Ask your adviser: Read the whole policy document carefully. If there is anything you don't understand, ask the company or your adviser to explain it.
Income protection
Income-protection insurance can be just as important as term life
insurance. It provides cover for you if you become unable to work and
can’t provide income for your family. One insurance expert we spoke to
prefers a balanced approach: he covers his income but has some life
insurance and modest levels of trauma insurance too.
More than half the companies that provided our life-insurance quotes also offered income protection.
Buying cover
There are many ways of buying cover - through brokers, financial advisers, over the phone and in person at banks and insurance centres.
You need to be a Gold or Silver member to view this content.Variations in cover
The main reason for life insurance is to provide a lump-sum payment when you die or are terminally ill.
You need to be a Gold or Silver member to view this content.
Underinsured
A recent survey commissioned by the Financial Services Council (FSC)
found that although 90 percent of respondents have general house,
contents or car insurance in New Zealand, only 56 percent had life
insurance and barely 21 percent had income-protection insurance. Over
half of those with life insurance are underinsured.
The research also showed only 20 percent of respondent
households would cope for more than 12 months paying their household
expenses and maintaining their lifestyle if a serious illness meant the
primary income earner was unable to work. More than half of the
respondents found the area of personal risk "too hard".
Paying the premium
Most people pay their insurance monthly or fortnightly rather than annually. This means paying smaller amounts more often.
You need to be a Gold or Silver member to view this content.Comparing policies
We asked 21 life insurance companies to provide monthly quotes for term policies with a lump-sum payout for our fictional couples.
You need to be a Gold or Silver member to view this content.Couple in their 20s
Young couple Josh (29) and Kara (27) own a house with a mortgage.
Should either Josh or Kara die, they’d need to cover basic funeral expenses ($10,000) and pay off their mortgage. They’d also need an income to support the remaining person.Upgrade to a Gold or Silver membership to view our table of premiums.
Couple in their 40s
Craig (49) is an accountant and Sharon (47) is a receptionist.
Both are non-smokers and in good health. They have 2 teenagers. If either Craig or Sharon died, the remaining family would need to pay off all debts plus the funeral expenses and then have enough income to support them for at least 5 years.Upgrade to a Gold or Silver membership to view our table of premiums.
Life insurance calculator
Our advice
Here's our advice for before and after you have life insurance:
- Shopping for cover: Get at least 3 quotes. Premiums can differ by hundreds of dollars. Ensure any pre-existing medical conditions are covered.
- Ask your financial adviser if there's anything you're unsure about, and get them to explain it to you. Make sure you do this before you sign.
- When you have insurance: Keep the policy in a safe place - where your will is kept, or with your lawyer - and let your partner or family members know about it.
- Every few years, review how much cover you need, particularly after major life changes such as marriage or divorce, having children, or children leaving home and becoming independent.
- If you are changing insurers, don't cancel your old cover until you have been confirmed as a customer of the new insurer.
Financial stability ratings
The regulation of insurers has recently been enhanced and given to
the Reserve Bank to oversee. It requires all life insurance companies to
disclose a financial stability rating. These are issued by A.M. Best,
Fitch or Standard and Poor's on all insurers listed in our survey. These
ratings can be found in our policies database.
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