Frequently asked questions

We do not size cover with an income-multiple rule of thumb. We work out the family's real gap: mortgage balance + children's education until they are financially independent + a number of years of household living costs, plus any other debts, less existing savings and cover. For example, with a $600k mortgage, $150k for children's education and $700k for 10 years of living costs, you would need around $1.45M of cover. More is not automatically better — the sum insured has to be weighed against the premium to find the amount the family can afford that genuinely closes the gap.

Almost all life insurance sold in New Zealand is pure protection: you pay premiums for a death benefit, there is no cash value, and nothing is returned if you cancel or the cover ends. It is different from the savings-style whole-of-life policies common in China.

How long it lasts: most products are renewable term cover that continues until you cancel or reach the policy's age limit. A few products cover you for life (for example AIA Cover for Life), but their wording also states there is no surrender or cash value.

The real choice is the premium structure: stepped premiums start cheap and rise every year with age; level premiums cost more at first but stay flat for the chosen term regardless of age, usually cost less over the long run, and are a common choice for children's trauma cover.

Usually yes. Group insurance coverage is often insufficient (typically only 1-2 times annual salary) and ends when you leave your job. Personal insurance can supplement the coverage gap and is portable, unaffected by job changes.

ACC: Only covers accidental injuries, including medical costs and income compensation (80%), but doesn't cover illness.

Private Health Insurance: Covers illness and medical conditions, provides faster treatment access and more choice, but doesn't cover accidents (handled by ACC).

It depends on the type of cover. Health insurance: private medical cover in New Zealand generally has no general waiting period — conditions that start after the policy begins can be claimed, provided you disclosed honestly. Only specific benefits carry waits: some insurers require 1 year for wisdom teeth, 2–3 years for loyalty benefits, 1–2 years for maternity benefits. Insurers manage risk with pre-existing condition exclusions, not by making you wait six months.

Trauma insurance: the major conditions (cancer, heart attack, stroke) usually carry a 90-day stand-down; a diagnosis within 3 months of the start date is not paid.

Income protection: here “waiting period” means something different — the elimination period you choose at application (commonly 4 weeks to 2 years) that must pass before monthly benefits begin.

Pre-existing conditions are usually not covered, or have special waiting periods and restrictions. It's crucial to honestly disclose all health conditions when applying. Some insurers may accept certain pre-existing conditions but with additional premiums or exclusions.

If you cannot work because of illness or injury, income protection pays a monthly benefit after the waiting period you chose (commonly 4 weeks to 2 years, e.g. 4/8/13/26/52/104 weeks). The benefit is typically up to 75% of your pre-disability income, or a pre-agreed fixed amount on agreed-value products. Payments continue until you can return to work or reach the policy's benefit period or age limit (e.g. 65).

This depends on your emergency savings and sick leave benefits. If you have 3 months of savings, you can choose a 90-day waiting period to reduce premiums. If savings are limited, consider a 30-day waiting period. Remember, shorter waiting periods mean higher premiums.

Own Occupation: Pays if you can't perform your specific job, more comprehensive but higher premiums.

Any Occupation: Only pays if you can't work in any job suited to your education and experience, lower premiums but more restrictive.

It varies by cover type and complexity; there is no standard timeframe. Broadly, outpatient and diagnostic claims on health insurance are fastest (a few working days to two weeks), and surgery or hospital claims that were pre-approved are paid quickly after discharge. Life and trauma claims need medical evidence and sometimes medical records, so they usually take weeks; income protection claims require an assessment of your capacity to work and often take longest. Complete documents submitted promptly, with your adviser following up, is the most effective way to speed things up.

First ask the insurer for the reason in writing. Many declines can be challenged — that is exactly where an adviser earns their keep, by dealing with the insurer, supplying further evidence and appealing on your behalf. If you are still unhappy, use the insurer's internal complaints process (they have 2 months to resolve it). If it remains unresolved or reaches deadlock, you have 3 months to take it to the Insurance & Financial Services Ombudsman Scheme (IFSO, 0800 888 202), an independent service that is free for consumers.

Typically needed: Claim forms, medical certificates, doctor's reports, receipts and invoices, proof of identity, policy documents. For income protection claims, also employer confirmation and proof of income. Keep copies of all relevant documents.

Health insurance: every insurer's premiums rise. They are priced by age band and then adjusted for medical inflation and the insurer's overall claims experience — not your personal claims, so claim when you need to.

Life, trauma and similar covers: it depends on the premium structure you chose. Stepped premiums rise every year with age; level premiums do not rise with age for the chosen term, but unless the policy says Guaranteed, the insurer usually keeps the right to review its overall rates (Partners Life and Chubb, for example, both distinguish Guaranteed from Non-Guaranteed level premiums in their wordings, with the guaranteed version costing more). Some insurers also add a loyalty discount that grows each year after the second year.

Personal premiums for life, trauma and health insurance are not tax deductible, and the payouts are not taxed. Income protection comes in two kinds: where the benefit is taxable as income (indemnity / loss-of-earnings types) the premiums are deductible; where the benefit is tax-free (agreed value) the premiums are not — Inland Revenue's rule is that premiums are deductible only if the payout would be taxable. Business owners insuring staff or key people have separate rules. Check your own situation with an accountant.

Several ways: Increase excess/deductibles, choose longer waiting periods, bundle multiple insurances, maintain healthy lifestyle for discounts, choose stepped premiums (cheaper when young), shop around for best prices.

Usually no. Applying for insurance in New Zealand mainly involves a health questionnaire, answered honestly under the duty of disclosure; insurers sometimes obtain your GP records to underwrite. Only for very large sums insured, or when the questionnaire and records are not enough to assess you, might an insurer ask for a medical exam or blood tests — and that is relatively uncommon.

Yes, but you must disclose previous declines in new applications. Different insurers have different underwriting standards, so a decline from one doesn't mean all will decline. Consider consulting an insurance advisor to find the most suitable insurer.

The sooner the better! Premiums are cheapest when young, health is usually best, and it's easier to get coverage. Important life events like marriage, buying a home, having children should trigger insurance needs reassessment. Don't wait until health issues arise to consider insurance.