Life Insurance
New Zealand Life Insurance
Life insurance in New Zealand can lessen the financial trauma associated with a loved one passing away. Read on to find out more about taking out a life insurance policy and getting a life insurance quote from a New Zealand life insurance company.
Life insurance is becoming a popular form of insurance as New Zealand families realise that insuring a life is equally, if not more important, than insuring a home or motor vehicle. In this article we take you through the in's and out's of New Zealand life insurance.
What is life insurance?
Life insurance is a lump sum payment given in the event of death. This allows family and dependants to be financially secure and protected if you die unexpectedly. Some life insurance policies offer a lump sum payment in the event of a terminal illness that will result in death in a specified timeframe, such as one year. A related policy is disability or crisis cover; for example if a person suffers a heart attack, stroke or cancer and is unable to work for an extended period, or can never return to the workforce. These conditions do not have to be terminal for the cover to apply.
Do I need life insurance?
As a guideline, if you have dependents you should have life insurance. Also, if you have significant debts, such as a mortgage or other loans, it is recommended that you take out a life insurance policy. It is very important that you get the correct level of cover on a life insurance policy. The payments can be taxing and it is prudent to spend time looking for the right amount of cover at the right price.
How much life insurance cover do I need?
The level of cover required in your New Zealand life insurance policy will depend on your family's situation and circumstances, and will change over time. A good way to estimate this is to go for the worst case scenario - if you were to die tomorrow what level of cover would you need? This level of cover can be estimated by adding up costs such as the following:
- All debts - including mortgages, credit cards and personal loans.
- Funeral costs - these may be high if relatives need to be flown in from overseas.
- Funds for education - were you planning on providing for your children's education? How much will that cost?
- Medical costs - hospital and care bills may be high in the event of a terminal illness.
- Future income - how much do you want to provide for your family when you are no longer there to provide an income?
There are various life insurance calculators and tools available online to assess an appropriate level of cover, however it is recommended that you go in and see your NZ life insurance company to find the policy that is right for you.
NZ life insurance premium calculations and exclusions
NZ life insurance policy premiums are based on age, gender, the amount of insurance you wish to obtain, whether you are a smoker or non smoker, and any existing medical conditions. Some premiums will be adjusted to reflect a risky occupation or a high-risk lifestyle. Life insurance policies are usually adjusted upwards each year to match inflation, so the relative buying power of your policy stays constant over time. Some exclusions apply to life insurance in New Zealand and will result in non payment of a policy; suicide within 13 months and non-disclosure of serious medical conditions are two examples. Check with your provider for details of your insurance policy.
Where can I get life insurance in New Zealand?
Life insurance policies and quotes are available online and over the phone, from:
- Major New Zealand insurance companies, as well as smaller insurance providers. The major players in the life insurance market in New Zealand are Sovereign, Asteron, Tower, ING and AXA.
- Many New Zealand banks offer life insurance policies to their customers.
- A range of New Zealand insurance brokers, but be warned brokers will almost invariably be being paid commission for selling a life insurance product, which may result in an unsuitable life insurance policy.
As with any form of insurance, it pays to shop around before committing to a life insurance policy. Life insurance in New Zealand is not cheap, but will prove invaluable to your family in the event of your untimely death.
Looking for more information? Find New Zealand life insurance in the NZS.com directory.
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Business images from Flickr: Sky Tower, New Zealand Flag and Wellington Buildings.
