Life insurance is a policy that pays a lump sum to your chosen beneficiaries if you die or are diagnosed with a terminal illness with less than 12 months to live. It's designed to protect the people who depend on you financially when you're no longer around to provide for them.

In New Zealand, most life insurance policies are "term" cover — meaning you're covered for as long as you keep paying your premiums, typically up to age 70 or 80. If you pass away during that time, your insurer pays out the agreed sum to your partner, family, or estate. The pay out is not taxed, meaning your beneficiary has full use of the money.

That money can be used for anything: paying off the mortgage, covering day-to-day living costs, funding your children's education, or simply giving your loved ones time to grieve without financial pressure. Sometimes a family's Will can stipulate how a life insurance payment is spent, generally that is the only restriction that can exist.

Life insurance doesn't require a medical exam in most cases (apart from large applications, usually over $2.5mil NZD of cover), and policies can be set up quickly with the assistance of a broker to help guide you through the various insurers, benefits and applications platforms. The cost depends on your age, health, the amount of cover, and whether you smoke.

If you're not sure how much cover you need or which policy is right for you, speaking with an insurance broker like Elan is free and takes the guesswork out of the process.

Life insurance in NZ works by paying a tax-free lump sum to your nominated beneficiaries if you die or are diagnosed with a terminal illness with less than 12 months to live. You pay a regular premium to maintain your cover, and in return the insurer takes on the financial risk.

Here's how it works in practice: you choose an amount of cover (e.g. $500,000), nominate who should receive it, and pay a monthly or annual premium. If you die while the policy is active, your insurer pays that sum directly to your beneficiaries — usually within weeks after receiving the completed claim form and death certificate.

In New Zealand, life insurance payouts are generally tax-free for the recipient. Policies don't accumulate a cash value like KiwiSaver does — however life insurance policies can often increase the benefit level over time in proportion to the inflation rate that year. This ensures your life insurance maintains a constant level of ‘purchasing power’. Customers can ‘opt out’ of inflation adjustments if they want to maintain a constant insured amount.

A few things to be aware of in NZ:

- ACC does not cover death from illness, only injury — so life insurance fills a critical gap. In 2023, only 6% of NZ deaths were due to accidents and the financial support was minimal in these instances, mostly under $10,000.

- Most NZ policies include a 13-month exclusion period for suicide

- You can nominate multiple beneficiaries and specify how the payout is split

Working with an independent broker like Elan means you get advice across all the major NZ insurers — AIA, Fidelity Life, Partners Life, Asteron, Chubb and more — so you're not locked into one provider's product.

Life insurance cost in New Zealand heavily depends on a few factors, however it can often be between $10 and $200 per month, though the exact amount depends on several factors. The biggest drivers of cost are your age, the amount of cover you want, your health, and whether you smoke.

As a rough guide (as of 2026 pricing):

- A healthy, non-smoking 30-year-old might pay around $25–$40/month for $500,000 of cover

- The same cover for a 50-year-old in good health might be $80–$150/month

- Smokers or vapers typically pay 50–100% more than non-smokers

Other factors that affect the premium include your any pre-existing medical conditions, and whether you choose a level premium (fixed cost) or stepped premium (increases with age).

One thing many Kiwis don't realise: going through an insurance broker doesn't cost more than going direct. Elan's advice is free, and your premium will be the same as (or sometimes better than) what you'd pay going straight to an insurer. The difference is you get expert guidance on finding the policy that fits your situation.

The best way to get an accurate figure is to get a personalised quote. Get in touch with the Elan team for a free, no-obligation comparison.

If anyone depends on you financially — a partner, children, or other family members — then life insurance is worth serious consideration. Without it, your loved ones could face significant financial hardship if you were to die unexpectedly.

Think about what your income covers right now: mortgage payments, school fees, groceries, utilities. If that income disappeared tomorrow, how long could your family manage? Life insurance exists to bridge that gap.

You may want life insurance if:

- You have a mortgage or other significant debt

- You have children or dependents

- Your partner would struggle financially without your income

- You're a business owner with financial obligations

You may need less (or none) if you have no dependents, significant savings, or your partner is fully financially independent. That said, getting cover while you're young and healthy locks in a lower premium — waiting until you're older or have developed a health condition can make cover more expensive or much harder to obtain.

In 35 years we’ve seen many instances in NZ where people wait to get life insurance until the last critical moment (i.e. once debt and children are factors), only to find that it’s now unaffordable or perhaps even inaccessible due to a recent health issue they’ve experienced. It’s therefore intelligent to lock in a small amount of life insurance sooner which can then be increased in the future up to certain limits without further assessment of your health.

Not sure if you need it? The team at Elan can talk through your situation for free and give you an honest assessment with quality advice built on 35 years of experience.

A common starting point in New Zealand is 10 times your annual income, though the right amount heavily depends on your personal situation. Try our life insurance calculator to get a more accurate figure. The goal is to replace your income for long enough that your family can adjust financially without having to make drastic changes to their lives or sell critical assets, like the family home.

Key things to factor in:

- Your outstanding mortgage balance

- Any other debts (car loans, credit cards, student loans)

- How many years your dependents would need financial support

- Your partner's income and earning potential

- Childcare or education costs (younger children require financial assistance for longer).

- Funeral expenses (typically $10,000–$20,000 in NZ)

For example, if you earn $80,000 a year, have a $450,000 mortgage, and two young children, you might want $1–1.5 million in cover to ensure your family is fully protected.

The best way to work out the right number — it's a conversation with an adviser who understands your full picture. Elan offers free, personalised advice across all major NZ insurers, so you get a recommendation that's actually tailored to you. Head through to our enquiry page.

Life insurance in New Zealand covers death and terminal illness. If you die while your policy is active, your insurer pays the agreed lump sum to your nominated beneficiaries. If you're diagnosed with a terminal illness and given less than 12 months to live, most policies allow you to receive an early payout — often called an "advance payment" or "terminal illness benefit."

What life insurance does not cover:

- Illness or injury that doesn't result in death or terminal diagnosis (that's what trauma and income protection cover)

- Suicide within the first 13 months of the policy in most NZ policies

- Fraudulent or criminal circumstances

Some policies also include additional benefits such as:

- Bereavement support or counselling services

- Premium waivers under certain conditions

- Special events increase options (e.g. after having a child or taking on a mortgage)

- Repatriation benefit to fund transfer of your remains.

- Terminal Illness Advance benefit which can pay up to 30% of your insured amount for certain conditions, mainly stage 4 cancers and neurological conditions.

It's important to read your policy wording carefully, as definitions and exclusions vary between NZ insurers. An independent broker like Elan can walk you through the differences between policies and make sure you're not caught out by fine print at claim time.

For most New Zealanders with dependents, a mortgage, or financial obligations, life insurance is absolutely worth it. The monthly cost is modest compared to many other insurance benefits and also the financial security it provides is huge. The payout can mean the difference between your family keeping their home or being forced to sell at a bad time.

New Zealand doesn't have a state-funded safety net for death from illness — ACC only covers accidental injury, which accounts for approximately 6% of deaths in NZ. If you die from cancer, heart disease, or any other illness (which accounts for the vast majority of deaths in NZ), your family receives nothing from the government. Life insurance fills that gap directly.

The most useful question to ask isn't "is life insurance worth it in general" — it's "would the people I love be financially okay if I died tomorrow?" If the answer is no, then it's worth it for you. If you see people depending on you in the future, as in, you aspire to have a family and children some day, then it’s also intelligent to get a small amount of life insurance now, to guarantee access to it in the future when it’s critical. If you're unsure, a free conversation with the Elan team can help you work that out.

No — life insurance payouts in New Zealand are not taxable. The lump sum paid to your beneficiaries upon your death or terminal illness diagnosis is received tax-free under current NZ tax legislation.

This is one of the advantages of life insurance over some other forms of financial planning. Whether the payout is $200,000 or $2 million, your beneficiaries receive the full amount with no tax deducted.

It's worth noting that this applies to personal life insurance. The tax treatment of life insurance taken out through a business (e.g. key person insurance) can be different, and you should seek specific tax advice in that context.

Premiums for personal life insurance are generally not tax-deductible either — but for business-related policies, the rules differ. If you're a business owner, the Elan team can point you in the right direction and help structure the policy to be of maximum financial benefit.

Life insurance in New Zealand also has no GST component to the premiums or the payout.

The best time to get life insurance is as early as possible — ideally when you're young and in good health. Premiums are significantly lower for younger applicants, and you lock in cover before any health conditions develop that could lead to exclusions or higher than standard premiums (loadings).

The most common trigger points for Kiwis taking out life insurance are:

- Buying a home (taking on a mortgage)

- Getting married or entering a long-term relationship

- Having children

- Starting or buying a business

If you wait until later in life, you may still be able to get cover — but it will cost more, and any health conditions you've developed may be excluded or result in a loading on your premium.

The risk of delaying is real: a 35-year-old who develops diabetes or high blood pressure before applying may pay significantly more (or face exclusions) compared to what they'd have paid at 28. Getting covered now, while you're healthy, protects your future insurability. Elan has seen this play out over and over again with people who enquire with us too late and it negatively affects them.

Yes, in many cases you can still get life insurance with a pre-existing medical condition, though the terms may vary. Depending on the condition, your insurer may accept your application as normal, apply a premium loading (a higher premium), add a specific exclusion for that condition, or in some cases decline cover altogether.

Generally, the more serious the health condition, the more likely it is to cause an outright decline. If the health issue is very specific and its affect localised within the body, an exclusion is likely. However, if your health issue is more general, such as obesity, high blood pressure or elevated cholesterol, then a premium loading (increase in cost) is the likely outcome.

Common conditions that are often accommodated with a loading or exclusion include controlled diabetes, high blood pressure, past mental health treatment, and musculoskeletal issues.

The key is full and honest disclosure when you apply. Non-disclosure of a pre-existing condition can result in a claim being declined down the track — which is the worst possible outcome for your family.

Different NZ insurers assess risk slightly differently, which is one of the reasons working with an independent broker like Elan is valuable. Elan knows which insurers are most competitive for specific conditions and can shop your application accordingly — saving you time and potentially money.

Yes — most life insurance policies in New Zealand include a terminal illness benefit as standard. If you're diagnosed with a terminal illness and a doctor certifies you have 12 months or less to live, you can usually claim your life insurance payout early, while you're still alive.

This is sometimes called an "advance payment". It means you can use the money to pay off debt, fund treatment, spend time with family, or plan your affairs — rather than leaving it all to your estate.

The 12-month threshold varies slightly between insurers (some use 24 months), so it's worth checking the specific wording of your policy. The payout under a terminal illness claim is typically the full sum insured, and it's paid tax-free.

Some policies include a ‘terminal illness advance’ payment which will pay you a portion of your total life insurance irrespective of whether you’ve received the terminal 12-month diagnosis. To qualify you need to have been diagnosed with one of the listed conditions, usually stage 4 cancers and serious neurological conditions can qualify. These conditions might not cause a medical professional to definitively say you have less than 12 months to live, however in many cases they can cause death. My own mother (Barbara Pykett) received this benefit after a stage 3/4 pancreatic cancer diagnosis in 2018, she was treated in Auckland hospital and recently reached 8-years cancer free, despite being able to claim the ‘terminal illness advance’ benefit.

If you want to make sure your policy includes this benefit — and that the definition is favourable — the Elan team can compare policies from all major NZ insurers on your behalf.

Life insurance pays out when you die or are terminally ill. Trauma insurance (also called critical illness cover) pays out when you're diagnosed with a serious illness or injury — like cancer, a heart attack, or a stroke — but survive.

This is an important distinction. Many serious illnesses are survivable with modern medicine, but the financial impact of not being able to work, needing long-term treatment, or requiring full-time care can be devastating. Life insurance doesn't help you in that scenario — trauma insurance does.

At Elan we see many successful trauma claims each year since many of the stronger trauma policies payout on around 50 different conditions. Life insurance is thankfully claimed on far less.

The two types of cover are often held together because they protect against different risks:

- Life insurance protects your family if you die

- Trauma insurance protects you (and your family) while you're alive but seriously ill

Some NZ policies offer "accelerated" trauma cover, which is linked to your life insurance sum — any trauma payout reduces your life cover. "Stand-alone" trauma cover pays independently, without reducing your life insurance.

In many cases, we believe that an intelligently utilised trauma payout will often decrease your need for life insurance anyway, which means ‘accelerated’ trauma insurance is often sufficient and will cost far less than ‘standalone’ trauma.

Not sure which combination is right for you? Elan can help you structure cover that addresses both risks efficiently.

If you miss a premium payment, your cover doesn't end immediately. Most NZ life insurers will allow you to miss up to 2 or 3 months worth of payments before cancelling your policy. This gives you time to make the missed payments up before your policy lapses.

If you don't pay within that grace period, your insurer can cancel the policy by notifying you in writing. Once cancelled, you lose your cover and would need to reapply — potentially at a higher cost if your health has changed.

If you're struggling financially, it's worth contacting your insurer or broker before missing a payment. Options may include temporarily reducing your cover amount (which lowers the premium), changing your payment frequency, or exploring whether you qualify for a premium holiday.

One thing to avoid: letting your policy lapse and then reapplying later. You'll lose the premium you've already paid into the policy, and there's no cash value or refund. The Elan team can help you explore options if you're finding your premiums hard to manage.

Yes, most NZ life insurance policies allow you to increase your cover after the policy is issued — in some cases without providing additional health information.

Many policies include a Special Events Increase Facility, which lets you top up your cover when major life events occur, such as:

- Having a child (by birth or adoption)

- Getting married or entering a civil union

- Taking out or significantly increasing a mortgage

- A substantial increase in your income

These increases can usually be made without answering new health questions, which is highly valuable if your health has changed since you first took out the policy.

Outside of special events, you can apply for additional cover at any time, though this will involve a standard underwriting assessment. Any increase in cover attracts an additional premium.

If your life circumstances have changed and you're wondering whether your current cover is still adequate, the Elan team can review your policy and recommend adjustments — at no cost to you.

Yes — most NZ life insurance policies provide worldwide cover. You remain insured regardless of where you travel, how long you're away, or why you're overseas, as long as you keep paying your premiums and your policy remains active.

This means that even if you relocate overseas for work or travel long-term, your life insurance cover continues. In the event of a claim, your beneficiaries in New Zealand would receive the payout in the normal way.

It's worth checking your specific policy wording to confirm, as some older or more limited policies may have restrictions. If you're planning an extended period overseas, it's a good idea to let your broker know so they can confirm your cover remains in place and help you manage your policy remotely.

Many NZ Life insurers will require you to at least be in NZ when you complete the application. If you have definite long-term overseas travel planned at the time of your application, you will need to disclose this, however it very rarely creates issues with getting the life insurance approved. In some cases, if you plan to travel to a dangerous country, this can make it more difficult to get life insurance.

‘Term life’ insurance covers you for as long as you keep paying your premiums, with no fixed end date — it's the most common type in New Zealand. ‘Whole of life’ insurance guarantees a payout whenever you die, regardless of age, and typically builds a cash value over time.

In NZ, ‘term life’ insurance dominates the market for good reason: it's far more affordable and provides exactly the cover most people need. ‘Whole of life’ policies are significantly more expensive and less commonly available from NZ insurers today.

Most Kiwis are best served by term life cover, potentially supplemented by investment vehicles like KiwiSaver for long-term wealth building. If you've seen whole of life policies marketed to you, it's worth getting independent advice before committing — the Elan team can help you compare options.

It’s our general view at Elan that there is no large benefit with tying your life insurance to an investment vehicle and in fact, complicates and restricts the individual. A sensible ‘term life insurance’ policy that is setup and regularly reviewed, alongside a separate investment account to bolster your financial standing is the best solution.

The payout goes to whoever is nominated as the policy owner or beneficiary. If you're the sole policy owner and you die, the benefit is paid to your estate and distributed according to your will (or intestacy laws if you have no will).

If your policy is jointly owned — for example, with your partner — the payout goes directly to them, bypassing your estate entirely. This often speeds up the payout process drastically, which can be critical depending on the financial vulnerability of the remaining family members.

To make sure your payout reaches the right people quickly and without complications, it's worth:

- Nominating a joint policy owner (e.g. your spouse)

- Having an up-to-date will

- Keeping your contact and beneficiary details current with your insurer

If your circumstances have changed — new relationship, divorce, children — it's a good idea to review your policy ownership. Elan can help you make sure everything is structured correctly.

Yes — the vast majority of life insurance applications in New Zealand don't require a medical exam. Most people can apply with an insurance broker, answering health and lifestyle questions, without any tests or nurse visits.

In rare cases — usually when large sums are involved (often above $2,500,000 NZD) or specific health conditions require further investigation — an insurer may request a medical examination. If this happens, the cost is often covered by the insurer.

If a medical test is required, most commonly it will be a simple blood test or a request of your prior medical record from your GP. For more significant amounts of life insurance (above $2,500,000 NZD), the insurer may need you to undergo a medical exam with a senior physician and sometimes complete a cardiogram to check your heart health (ECG/EKG). This is all usually funded by the insurer.

The key is answering all health questions honestly. Non-disclosure of a medical condition is the most common reason claims are declined in NZ — and it's easily avoided by being upfront at application.

The main exclusion on most NZ life insurance policies is suicide within the first 13 months of the policy (or any reinstatement or increase). Outside of this period, suicide is generally covered.

Other circumstances that can result in a claim being declined include:

- Non-disclosure of a material fact at application (e.g. hiding a pre-existing condition)

- Criminal activity that contributed to the death

- Fraud in relation to the claim

Pre-existing conditions that weren't disclosed may also be excluded from cover — or if disclosed, may be specifically listed as exclusions in your policy schedule.

Unlike some overseas markets, NZ life insurance policies generally don't exclude war, terrorism, or specific occupational hazards at the standard policy level — though high-risk activities and occupations may attract loadings or specific exclusions at the underwriting stage.

That being said, once your policy is in place, a life insurer cannot subsequently exclude a dangerous hobby or occupation that you newly begin, if you had no intention to do so at application time. Basically, get your life insurance in place first, then you can become a professional skydiver and work as a bomb diffuser later in life without having these things excluded.

Always read your policy schedule carefully so you know exactly what's covered. If something isn't clear, Elan can walk you through it.

Most straightforward life insurance applications in New Zealand are processed within a few days, and some are approved instantly or within 24 hours.

The process typically works like this: you have a discussion with a broker who tailors a life insurance amount to you based on several factors, the broker then gives you quotes from the various life insurers and will often recommend one. Afterwards, if you are happy to proceed, you’ll complete an application (usually 15–20 minutes), and the insurer reviews your answers. If everything is straightforward, your policy can be issued quickly — often within 2–5 business days.

More complex applications — where additional medical information is needed, or where a health condition requires further assessment — can take 2–4 weeks.

Working through a broker like Elan can speed the process up, as they know which insurers are faster and can manage the back-and-forth with the insurer on your behalf.

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