Life Insurance NZ: Comparing Providers
Life insurance in NZ pays a lump sum or ongoing income to your dependents (or to you) when you die, become critically ill, or can't work. The main providers are Partners Life, AIA, Asteron Life (Suncorp), Fidelity Life, Cigna, and Accuro. You can't compare premiums directly without a personalised quote, because pricing depends on your age, health, smoker status, occupation, and cover amount, but you can compare what each provider covers, how they handle claims, and how financially strong they are.
Types of life insurance cover
NZ life insurance isn't a single product. It's a category covering five distinct types of cover. Most people need a combination, not all five.
Life cover (death benefit)
Life cover pays a lump sum to your beneficiaries when you die. This is the core product most people think of when they hear "life insurance." The payout can cover mortgage repayment, living expenses for your partner and children, debts, and funeral costs. Cover amounts in NZ typically range from $100,000 to $2,000,000+.
Trauma/critical illness cover
Trauma cover (also called critical illness cover) pays a lump sum if you're diagnosed with a specified serious illness or condition, such as cancer, heart attack, stroke, or major organ failure. You receive the payout while you're alive, and it's yours to spend however you need. Most policies cover 40 to 50 defined conditions, though the list varies by provider. Trauma cover is particularly valuable because it helps with costs that ACC and the public health system don't fully cover: mortgage payments while you recover, private treatment, travel for specialist care, or time off work beyond what sick leave provides.
Total permanent disability (TPD)
TPD cover pays a lump sum if you become totally and permanently disabled and are unlikely to ever work again. The definition of "total and permanent disability" varies by provider and policy, some use an "own occupation" definition (you can't do your own job) while others use an "any occupation" definition (you can't do any job). "Own occupation" provides broader cover but costs more.
Income protection
Income protection pays a monthly benefit (typically 75% of your pre-disability income) if you can't work due to illness or injury. Unlike the other types, this isn't a lump sum; it's an ongoing payment that replaces your income for a set period (usually 2 years or to age 65). Income protection policies have a waiting period (also called a stand-down period) before payments start, typically 4, 8, or 13 weeks. A longer waiting period reduces your premium but means you need savings or sick leave to cover the gap.
For more detail on this type of cover, see income protection insurance NZ.
Funeral cover
Funeral cover is a small life insurance policy (typically $10,000 to $25,000) designed to cover funeral and burial costs so your family doesn't have to find that money at a difficult time. It's often available without medical underwriting, which makes it accessible for older people or those with health conditions who may not qualify for standard life cover.
Provider comparison
The table below compares NZ's major life insurance providers across cover types, key features, and financial strength. Premiums are not included because they vary too much by individual circumstances to be meaningful in a static comparison.
| Provider | Life cover | Trauma | TPD | Income protection | Funeral | Financial strength rating | Key differentiator |
|---|---|---|---|---|---|---|---|
| Partners Life | Yes | Yes | Yes | Yes | Yes | A (Excellent), AM Best | Broad range of cover, strong claims reputation, NZ-based |
| AIA | Yes | Yes | Yes | Yes | Yes | A+ (Superior), AM Best | Large international insurer, wide adviser network, innovative wellness programme (Vitality) |
| Asteron Life (Suncorp) | Yes | Yes | Yes | Yes | Yes | A+ (Superior), AM Best | Part of Suncorp Group, strong financial backing, long NZ history |
| Fidelity Life | Yes | Yes | Yes | Yes | Yes | A- (Excellent), AM Best | NZ-owned and operated, direct-to-consumer option available |
| Cigna | Yes | Yes | Yes | Yes | Yes | A (Excellent), AM Best | Part of global Cigna Group, online application available, competitive pricing |
| Accuro | Limited | No | No | No | No | Not rated (health insurer primarily) | Health insurance specialist, some life cover options bundled with health plans |
Financial strength ratings (from AM Best) indicate a provider's ability to meet ongoing insurance obligations. An A rating or higher means the insurer is considered financially strong and likely to pay claims. All five major life insurance providers in NZ hold A-range ratings, which is reassuring. Accuro is primarily a health insurer with limited life cover options, so it's included for completeness but isn't a direct competitor for standalone life insurance.
What the ratings mean
| Rating | AM Best definition |
|---|---|
| A+ (Superior) | Very strong ability to meet ongoing insurance obligations |
| A (Excellent) | Strong ability to meet ongoing insurance obligations |
| A- (Excellent) | Strong ability to meet ongoing insurance obligations (lower end of excellent range) |
How much life insurance do you need?
A common starting point is 10 times your annual income. On a salary of $85,000, that's $850,000 in life cover. But this is a rough rule of thumb, not a calculation. The right amount depends on your specific situation.
The main factors to consider:
Outstanding mortgage. If you have a $600,000 mortgage and die or become permanently disabled, your family either needs to keep paying it or repay it in full. Life cover sized to cover the mortgage balance is a common baseline.
Dependents. If you have children or a partner who relies on your income, cover needs to replace that income for long enough to get them through. For young children, that might mean 15 to 20 years of income replacement. A couple with no children and two incomes may need less.
Partner's income. If your partner earns a good income and could manage the mortgage on their own, you may need less cover than someone whose partner doesn't work or earns significantly less.
Existing savings and assets. KiwiSaver balances, savings, and investments reduce the amount of cover you need. If you have $200,000 in savings and investments, that's $200,000 less you need from an insurance payout.
Debts beyond the mortgage. Car loans, personal loans, student loans, and credit card balances all need to be covered.
Funeral costs. The average funeral in NZ costs between $8,000 and $15,000 (FDANZ). This is often overlooked but is a real, immediate cost your family faces.
Existing cover. Check whether you have any life insurance through your employer, your KiwiSaver scheme (some include basic life cover), or ACC. ACC covers accidental death and injury but not illness. Employer group schemes often provide 1 to 2 times your salary in basic cover.
A quick calculation: outstanding mortgage + other debts + (annual income x years of income replacement needed) + funeral costs - existing savings and cover = approximate cover amount needed.
For a 35-year-old on $85,000 with a $600,000 mortgage, one child, and a partner earning $60,000, that calculation might look like: $600,000 (mortgage) + $20,000 (debts) + ($85,000 x 10 years of income support) + $12,000 (funeral) - $100,000 (savings and employer cover) = $1,382,000. That's roughly $1.4 million in life cover, plus potentially separate trauma and income protection policies.
These numbers are illustrative. A financial adviser can run a detailed needs analysis based on your actual situation.
How to reduce premiums
Life insurance premiums add up, especially as you get older. Here are the main ways to manage the cost.
Stepped vs level premiums
Stepped premiums start low and increase each year as you age. They're cheaper in the early years but become expensive in your 50s and 60s. Level premiums are higher initially but stay roughly the same over the life of the policy (they may still increase with CPI or insurer reviews, but the age-related increases are locked in).
For someone aged 30 to 35, stepped premiums are often the practical choice because they're affordable now and you can reassess in 10 to 15 years. If you're 40+ and planning to hold cover for 20+ years, level premiums can save you a significant amount over the life of the policy. Some providers let you switch from stepped to level mid-policy.
Reduce cover as your mortgage decreases
If a large portion of your cover is to protect your mortgage, consider reducing your cover amount as the mortgage balance drops. A $600,000 mortgage today might be $400,000 in ten years. Some providers offer reducing cover options that automatically decrease the sum insured over time, which reduces premiums as the cover decreases.
Bundle policies
Most providers offer a discount when you hold multiple types of cover (for example, life cover + trauma + income protection) with the same provider. The discount varies but is typically 5% to 15% of the combined premium. Bundling also simplifies admin, you deal with one provider for all your insurance.
Choose appropriate waiting periods
For income protection, the waiting period is the time between becoming unable to work and when benefit payments start. A 4-week waiting period costs significantly more than a 13-week waiting period. If you have 3 months of savings or sick leave, you can afford to choose a longer waiting period and save on premiums.
Don't over-insure
It's tempting to insure for the maximum possible amount, but premiums on $2 million of cover are roughly double those on $1 million. Match your cover to your actual needs (using the calculation framework above) rather than defaulting to the highest available.
Getting advice
Life insurance is one of the more complex areas of personal finance. The number of product types, the variations between providers, and the impact of your personal health and circumstances on pricing make it difficult to compare effectively on your own.
Most life insurance in NZ is sold through financial advisers, and there's a good reason for that. An adviser can:
- Run a personalised needs analysis based on your mortgage, income, dependents, and existing cover
- Compare quotes across multiple providers (most advisers have access to all the major insurers)
- Explain the differences in policy wording that matter at claim time
- Help you structure cover to manage premiums as your situation changes over time
- Manage the underwriting process (medical questionnaires, health declarations)
Financial advisers who arrange life insurance are typically paid by the insurance provider (through commission), not by you directly. This means getting advice usually doesn't cost you anything extra. However, the commission structure can vary by provider, so it's worth asking your adviser whether they're independent and whether they have access to all major providers.
Common questions
How much life insurance do I need?
A common rule of thumb is 10 times your annual income, but the right amount depends on your mortgage, debts, dependents, partner's income, and existing savings. A more precise approach: add up your outstanding mortgage, other debts, desired years of income replacement, and funeral costs, then subtract existing savings and any cover you already have through your employer or KiwiSaver. For a thorough needs analysis, talk to a financial adviser.
What does life insurance cover?
Standard life cover (death benefit) pays a lump sum to your beneficiaries when you die. Trauma/critical illness cover pays a lump sum if you're diagnosed with a specified serious illness (cancer, heart attack, stroke, etc.). TPD cover pays a lump sum if you're totally and permanently disabled. Income protection pays a monthly benefit if you can't work due to illness or injury. Funeral cover pays a small lump sum to cover funeral costs. Most people need a combination of these, not just one type.
Is life insurance tax deductible in NZ?
No. Life insurance premiums are not tax deductible for individuals in NZ (IRD). This applies to all types of personal life insurance: life cover, trauma, TPD, income protection, and funeral cover. However, if you receive an income protection benefit (a monthly payment while you can't work), that benefit is taxable as income. Life cover, trauma, and TPD lump sum payouts are generally not taxable.
What is the difference between stepped and level premiums?
Stepped premiums start low and increase each year based on your age. They're cheaper when you're young but become significantly more expensive as you get older. Level premiums are set at a higher rate initially but remain roughly constant over time (small increases for inflation or insurer reviews may still apply). Over a 20 to 30 year period, level premiums often cost less in total than stepped premiums, though they require a higher upfront commitment. The right choice depends on your age, budget, and how long you plan to hold the cover.
How do I make a claim on life insurance?
Contact your insurance provider or your financial adviser. For a death claim, you'll need to provide a certified copy of the death certificate, proof of identity for the claimant, and the policy details. For trauma or TPD claims, you'll need medical evidence from your specialist or GP. The insurer will review the claim against the policy terms and conditions. Processing times vary but most providers aim to settle straightforward claims within 4 to 8 weeks. Having an adviser manage the claim process can help, especially for complex or contested claims.
What is underwriting?
Underwriting is the process insurers use to assess your risk before offering you a policy. When you apply for life insurance, you complete a detailed health and lifestyle questionnaire covering your medical history, family health history, occupation, hobbies, smoking status, and sometimes your finances. The insurer uses this information to decide whether to offer you cover, at what price, and with what exclusions. Some conditions may result in a higher premium (a "loading"), an exclusion for a specific condition, or in some cases, a decline. Being honest and thorough on your application is essential, because if you fail to disclose a relevant health condition and later make a claim related to it, the insurer can decline the claim.
Do I need life insurance if I'm single with no dependents?
If nobody depends on your income, you may not need life cover (the death benefit). However, trauma and income protection cover can still be valuable because they protect you, not your dependents. If you were diagnosed with cancer or had a serious accident, trauma cover provides a lump sum for treatment and recovery costs, and income protection replaces your income while you can't work. ACC covers injuries but doesn't cover illness. Consider your own financial vulnerability, not just whether someone else relies on your income.
How do I compare life insurance providers?
Compare providers on cover types offered, policy features (such as the list of conditions covered under trauma), financial strength ratings (AM Best or S&P), claims process and reputation, and the flexibility to adjust cover over time. Don't compare on premium alone, because the cheapest policy may have exclusions or limited conditions that reduce its value when you need to claim. A financial adviser can provide quotes from multiple providers and explain the differences in policy wording that matter at claim time. See the provider comparison table above for a starting point.
What to do next
- Income protection insurance NZ: Detailed guide on how income protection works, waiting periods, and benefit periods
- Health insurance NZ: How health insurance complements life and trauma cover
- PAYE calculator: Check your take-home pay to understand how much you can allocate to insurance premiums
Last updated: 28 February 2026. Sources: Partners Life (partnerslife.co.nz), AIA (aia.co.nz), Asteron Life (asteronlife.co.nz), Fidelity Life (fidelitylife.co.nz), Cigna (cigna.co.nz), Accuro (accuro.co.nz), AM Best (ambest.com). Financial strength ratings are as published by AM Best. Premiums vary by individual circumstances and are not quoted on this page. This is financial information, not financial advice.
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This is educational content, not financial advice.