New Guide! Kiwi's compare Best Life Insurance Companies
The cheapest family life insurance policy and the best life insurance policy are not always the same.
And watch out for those tricky first-year discounts that often mean second-year costs increase unfairly and every year after that.
Would you like to know how much your premiums will cost in 10 years?
After all, it is your money.
A basic policy might cost less and may not pay out or pay out less in the event of a claim.
Reputation, claims history and credit rating are essential when considering a life insurance company.
The best life insurance companies in New Zealand offer policies with features and benefits that can be tailored to you and your unique family circumstances, to balance price and long-term coverage including convert increasing premiums to premiums that don’t increase with age.
Without any further health checks.
Who can you trust to be honest and give you the best life insurance with the cheapest premiums and best policy benefits?
Does the life insurance policy and insurer meet your needs and goals, or are you just being sold any policy?
And most importantly, does your insurance company have a rock-solid financial rating and financial ability to pay the claim as promised?
Best Life Insurance NZ Guide
If you are interested in a particular topic, feel free to jump ahead:
First, the Top 5 NZ Best Life Insurance Companies in right now!
The internet offers access to all sorts of life insurance quotes and policies. It can feel overwhelming.
And how can you be sure you are choosing the best life insurance company for you and your family life insurance needs?
Life Insurance policies are not all the same: some have limited features and benefits but may or may not save you a couple dollars.
Other life insurance policies are all-inclusive but may cost a tiny bit more.
You need to compare quotes from different providers and weigh up the different risk factors and premiums.
I love the old saying: ‘make sure you compare apples with apples’.
Think about that when you’re comparing insurance policies.
How to chose the best life insurance companies?
New Zealand’s insurance companies are regulated and monitored by the Reserve Bank of New Zealand, and there are 89 licensed insurers in New Zealand.
This includes travel, content, car, pet and life insurance.
After talking to industry experts and checking out the fine print I’ve narrowed the best life insurance companies in New Zealand down to five companies.
You might find it really difficult choosing between different life insurance companies thanks to all the jargon.
To make it easier for you I’ve waded through all the fine print and listed the best life insurance companies in New Zealand.
But remember New Zealand’s Best Life Insurance Policy is only as good, as it’s company.
I looked at five things to sort out the best life insurance in New Zealand from the ‘don’t waste your time’ types.
How I found the best life insurance
- Credit Rating
Ability to Pay Claims
Increasing Premiums vs Fixed Premiums
Who owns the policy the insurance company is selling?
- Policy Wording
The best life insurance companies will “pass back” advantageous policy wording in the future.
- Tailored Features & Benefits
Premium Holiday and Trauma Cover Buy-Back are probably the most popular optional benefits.
My team and I work with the best life insurance companies in New Zealand and we are here to help you make your decision easier.
So, here are the best life insurance companies in alphabetical order:
|Actual Solvency Capital:||$260.2M|
|Claims Paid 2018:||$634.1 M|
|Market Share Q3’19||31.7%|
|Rating:||A+ Standard & Poors|
|Actual Solvency Capital:||$410.0M|
|Claims Paid 2018:||$121.5 M|
|Market Share Q3’19||10.5%|
|Rating:||A A.M. Best|
|Actual Solvency Capital:||$58.9M|
|Claims Paid 2018:||?|
|Market Share Q3’19||11.7%|
The data above was acquired from each insurer’s website, FCA, Annual Statements and industry knowledge on the 21 February 2020.
1. Proven Top Credit Rating and Ability to Pay Claims
The last thing you need when life hands out some bad news are to hear that your insurance company isn’t able to pay out on your policy.
Financial strength ratings estimate the likelihood that an insurer will be able to meet its financial obligations, such as paying claims.
It’s a pretty reliable measure of whether or not a company is going to live longer than you will.
If you’re choosing between two companies, one rated AA- and one rated A+, either one is likely to be there when you need it.
But if you’re choosing between companies that are rated A+ and B++, financial strength may become a bigger factor in your decision. And more so post COVID-19.
The Best Life Insurance Companies in New Zealand, have a minimum credit rating from one of the following:
Comparing Credit Ratings for New Zealand’s Life Insurers 2020
By comparing New Zealand’s Life Insurance Companies Credit Rating, Pinnacle Life drop off the list as the company’s credit ratings are below our benchmark.
|Insurer||Minimum Credit Rating||Below Minimum Credit Rating|
|AMP||A- (Very Strong) Standard & Poor's|
|AIA||AA (Very Strong) Fitch|
|Asteron Life||A+ (Very Strong) Standard & Poor's|
|Cigna||A+ (Excellent) A. M. Best|
|Partners Life||A- (Excellent) A. M. Best||-|
|Fidelity Life||A- (Excellent) A. M. Best|
|OnePath||A (Strong) Standard & Poor's|
|Pinnacle Life||-||B (Stable) A. M. Best|
2. Guaranteed stepped to level conversion
Would you like to know how much your life insurance premiums will costs now and in 10 years?
Many families get a life insurance quote online and buy the cheapest life insurance policy.
Only to discover that the cheapest premiums have become too expensive after a couple years.
So, how do I get the cheapest life insurance premiums?
Statistics tell us that most Kiwis’ are forced to cancel the ‘cheapest’ life insurance policies when they need them the most – in their 50’s and 60’s. Because the premiums have become unaffordable.
Level premiums or fixed life insurance premiums, give you real peace of mind that your life insurance won’t be costing you anymore when you’re 64 than they do when you are 30.
The best life insurance companies in New Zealand offer you a choice of stepped and level premiums or combining both.
Without further health questions.
And this could be a good thing to do when your circumstances change, and you feel the need for more certainty and financial stability.
This means you can start with lower premiums that are more affordable for you now.
And when you reach a more stable period in life you can set your premium payments at a level you know you can afford for the rest of your life.
3. They own and underwrite their own policies
Did you know that many life insurance companies don’t own the products they sell?
Some, like Southern Cross Life Insurance, Countdown and The Warehouse, merely sell the policies provided by other companies.
Generally, these policies are basic off-the-shelf policies that don’t allow you to add options or customise the cover to fit your needs.
If you ever need to change or cancel your policy you won’t be dealing directly with the actual policy provider.
Now, I don’t want my loved ones to have the additional dramas and hassles of working through multiple company layers to collect the financial payout. Insurance needs to be simple and straightforward.
4. Policy Wording Pass Back
The best life insurance companies have a feature called “policy wording pass back“.
Any future advantageous upgrades, the best life insurance companies make to your policy will automatically ‘passed back’ to you.
This means the wording that would apply would be the best wording for your situation (the new wording or the existing wording on your original policy).
At LifeCovered, we believe “policy wording pass back” is almost like a policy Warrant of Fitness.
Without “policy wording pass back”, your policy will not evolve with time and you may miss out.
5. Tailored Features & Benefits
- Trauma Reinstatement
Trauma insurance reinstatement is an optional benefit where you can repurchase 100% of your trauma insurance 12 months after a claim benefit is paid.
- Terminal Illness Benefit
Means the insured person’s life expectancy is, due to sickness and regardless of any available treatment, not greater than 12 months.
- Special Events Increase
You can increase the life cover amount without the hassle of providing new medical evidence.
- Premium Holiday
Lets you stop paying premiums for up to six months if you experience financial hardship. You can still make claims during this time.
Pays you the Needlestick sum insured if the insured person contracts Hepatitis B or C or HIV while working. Available to people in the medical and emergency services industries.
Best Life Insurance NZ Comparison Table
In this best life insurance comparison, I have sourced quotes directly from the individual insurers.
Re-sellers like Countdown, State or AMI are not included.
Premiums are without any bundling discounts and are Yearly Renewable premiums, non-smoking male and female.
Compare life insurance rates - male
|2||AIA||AA- (Very Strong) Standard & Poor's||41.20||176.83|
|12||Asteron Life||A+ (Very Strong) Standard & Poor's||37.63||187.69|
|17||Partners Life||B++ (Good) A.M. Best||38.85||185.36|
|18||Fidelity Life||A- (Excellent) A.M. Best||39.53||199.84|
|19||OnePath||A+ (Strong) Standard & Poor’s||35.95||192.15|
Compare life insurance rates - female
|2||AIA||AA- (Very Strong) Standard & Poor's||33.76||137.01|
|12||Asteron Life||A+ (Very Strong) Standard & Poor's||25.81||149.19|
|17||Partners Life||B++ (Good) A.M. Best||28.43||149.09|
|18||Fidelity Life||A- (Excellent) A.M. Best||26.31||161.72|
|19||OnePath||A+ (Strong) Standard & Poor’s||25.85||155.31|
What I hope you see here is that no matter which insurer you go with, premiums double 5 to 6 times and more.
To further break down the costs and future costs of life insurance in New Zealand, I have made up three scenarios.
1. David and Liz, are both 25, don’t smoke, healthy and want Life Insurance cover for $750,000 to cover the mortgage.
- David’s cheapest Yearly Renewable Term Quote (lump sum payout) is $54.45 per month and increases to $14,546.53 when David is 80.
- A term life insurance (lump sum payout) until 80 for David would cost $116.16 per month.
- Premiums and the cover stays fixed and would cost less than a third compared to above “cheap” Yearly Renewable Quote.
- Liz’s cheapest Yearly Renewable Term Quote (lump sum payout) is $30.27 per month and increases to $11,063.47 when Liz is 80.
- A level term life insurance (lump sum payout) until 80 for Liz would cost $76.78 per month.
Level life insurance would start higher, but comparing the total premiums paid until 80, Liz would saved almost 70% of premiums paid, if selecting Fixed Premiums vs. Yearly Renewable Term policy, which started cheaper.
Things to consider:
- Long-term planning
- If budget is tight now, consider going Yearly Renewable now and switch to Fixed premiums when finances allow it.
- Option to combine yearly renewable term policy with a level term policy
2. Sandy and Rebecca, are both 25, smokers, healthy and want life insurance cover for $750.000 to cover the mortgage.
- Sandy’s cheapest Yearly Renewable Term Quote (lump sum payout) is $92.03 per month and increases to $20,611.65 when Sandy is 80.
- A term life insurance (lump sum payout) until 80 for Sandy would cost $207.02 per month.
- And over the lifetime, the total cost would be less than half compared to the total Yearly Renewable Term Policy cost.
- Liz’s cheapest Yearly Renewable Term Quote (lump sum payout) is $52.59 per month and increases to $14,546.53 when Liz is 80.
- A level term life insurance (lump sum payout) until 80 for Liz would cost $122.06 per month.
Term life insurance would start higher, but comparing the total premiums paid until 80, Rebecca would have paid almost 3 times more money for the Yearly Renewable Term policy, which started cheaper.
Things to consider:
- long-term planning
- quit smoking would save heaps of money
- use a broker to tailor short- and long-term cover to save more money
3. John 41, is healthy, non-smoker and wants to insure for $250.000 as a family protection
- The cheapest Life Insurance (lump sum payout) starts at $30.19 per month
- 20 years later, what started as the cheapest Life Insurance policy, at age 61 is $236.03 per month
- If John kept the stepped policy until age 80, he would have paid almost $400.000
- Fixed premiums until age 80 would be $78.97 per month.
Things to consider:
- long-term planning
- Getting advice from a broker and tailor short- and long-term cover to reduce costs.
Statistics tell us that Yearly Renewable Term policy owners switch insurance providers every 7 to 10 years.
That is because premiums increase. Why pay too much to an insurance company or bank?
And that is why, people like you and me, move insurers enticed by first years savings.
Only to be disappointed because premiums keep increasing anyway.
Sadly, very few insurance companies and banks provide projections of premiums and show you how much you are going to pay.
Life Insurance Basics
How health, lifestyle, and smoking determine premium costs – how you can get the cheapest premiums and how life insurance can work as family protection insurance for future generations financial heritage.
What is life insurance?
Life Insurance is sometimes used as a general term for all the policies that life insurers offer.
To break it down, life insurance comes in many shapes and forms. And here are the most common ones:
- Life Insurance
Sometimes called death benefit
- Accident Death Insurance
Pays a lump sum if you die in an accident
- Trauma or Critical Illness
Pays a lump sum if you are diagnosed with a specific illness
- Income Protection Insurance
Secures a monthly income if you cannot work due to illness or accident
- Mortgage Protection
Pays a tax-free monthly benefit to cover your mortgage
Many Kiwi’s mistakenly believe that the best life insurance deal is the policy with the cheapest premiums today.
Only to discover premiums increasing year after year and becoming more and more unaffordable.
Forcing many to cancel, when they need it.
The best life insurance deal is Life Insurance Premiums that don’t increase with age, because cover and premiums stay the same and are more affordable long-term, saving you a lot of money now, helping to build your assets for retirement.
A pre-existing health condition such as heart disease, stroke, weight, cholesterol, cancer, high blood pressure, diabetes, pre-diabetic, kidney and liver disease in itself might not be a reason for declined life insurance.
An experienced life insurance broker knows how each insurance company defines pre-existing conditions and how pre-existing health conditions are dealt with on a case-by-case basis.
It might be tempting not to disclose a medical or health condition. But honesty is the best policy.
Because life insurance is a legal document and you have a legal duty of disclosure.
An independent, trustworthy insurance broker has the know-how and experience to quote you the best life insurance deal from the top life insurance companies in New Zealand.
Be open and honest to your life insurance broker, and in return, the broker works for you to quote you the best policy that suits your needs.
One of the main advantages of group life insurance is automatic acceptance, which often means full cover for pre-existing health conditions and discounted premiums.
Life Insurance Definition
What are the different types of life insurance policies?
Many different types of life insurance policies are offered in New Zealand.
For a claim to be accepted and paid, the insured has to die or become terminally ill. Sometimes Life Insurance is also called Death Benefit Insurance.
Before the following life insurance policies can be issued, the insurer will assess risk, simply put the insurer will assess your risk of dying earlier than the average person of your age and gender.
People with the same or similar risk pay the same or similar premium rates.
If you have health problems, you could face increased premiums, or even be declined insurance.
- Life Insurance
- Family Protection Insurance
There are also other life insurance policies, where no medical questions or health checks are required.
These policies are guaranteed acceptance life insurance.
No medical life insurance is ideal for those looking to get life insurance quickly, that might have pre-existing conditions such as high blood pressure, weight or cancer. The cost is often higher for no medical life insurance vs risk assessed life insurance.
- Accident Death Cover
- Guaranteed Acceptance Life Insurance
- Funeral Insurance
People Also Ask
How much Life Insurance do I need?
A good rule of thumb is 10-12 times your annual income in life insurance. If invested well, that money can help your family live comfortably.
I'm diagnosed with Thalassemia - can I get life insurance?
Some insurers will not offer you any cover. While specialists insurers may offer people with thalassemia normal terms. If the thalassaemia has moderate to severe symptoms then Life Insurance may be available to you at special terms or in extreme cases declined
Cigna has deferred me because I'm overweight. Am I insurable?
Deferred with one company might mean you have better chances with another insurance company. A good insurance broker can find you the best policies and best companies to fit your circumstances. Usually brokers are fee free and at no-cost.
How does a pre-existing condition affect life insurance?
A pre-existing health condition such as heart disease, stroke, weight, cholesterol, cancer, high blood pressure, diabetes, pre-diabetic, kidney and liver disease in itself might not be a reason for declined life insurance. Is it a bad idea to give us a call?
How does a fixed premiums life insurance policy work?
Many New Zealanders are used to life insurance premiums increase every year.
With Fixed life insurance, premiums don’t increase with age.
Can I have more than one life insurance policies?
How much does life insurance cost?
The cost of a life insurance policy depends on your age, gender, occupation, your health, your family health history, lifestyle and the dollar amount the death benefit you want. The younger and healthier you are, the lower your premium will be.
Who has the best Life Insurance Policy?
There is no one size fits all when comparing the best life insurance policy. But the best life insurance policy is the one that is tailored purposefully with extra optional coverage and benefits if needed to build a financial protection plan for you and your family.
What else should I know when buying life insurance?
Some policies have nasty exclusions.
Some life insurance policies exclude certain conditions (e.g. cancers and heart conditions) that could leave you without support if you develop those conditions.
Other policies may require you to jump through all sorts of hoops to prove your claim.
So make sure you check the fine print for exclusions.
The Best Life Insurance Companies New Zealand have you covered for all cancers. And they accept claims for heart attacks as defined by the medical profession and not under the more narrow insurance profession definition.
Do yourself a favour and work with a broker.
When I was a kid, I always thought insurance brokers were there to pick up the pieces when things got broken.
In a funny kind of a way, that’s true, but they’re also there to prevent things getting broken in the first place. By that I mean a broker can prevent you buying a dud policy that doesn’t meet your needs.
A good Insurance broker will help you select the best policies for all your requirements. And they’ll negotiate the best premium prices on your behalf. Some people think brokers get a huge commission to sell you expensive policies and add-ons you don’t need.
The truth is Insurance companies include a broker fee when they set their premiums, so even if you buy your policy directly through an insurer website, your premiums will be the same as if you worked with a broker.
The only difference is where that commission money goes.
Ironically, you may even end up paying less by using an insurance broker.
Insurance brokers know where to get the best deals on life insurance, and will often get you a lower premium than you can get on your own.
At LifeCovered we’ve dealt with the fine print in insurance policies every day for years. It’s our business to get the best deal for you.
Futureproofing Price and Coverage When Buying the Best Life Insurance Policy
The five best insurance companies in New Zeland listed here all came up trumps for all of my test criteria.
All of these insurance companies provide policies that stand out above the rest.
It can be tempting to buy a cheap policy and save some money in the short term.
My team and I are here to serve you. Contact us now.
So we can compare policies, exclusions and futureproof your family protection insurance so that you can have coverage when you need it the most.
Our work is free……well not really…..In life, there are no free sandwiches.
We all know that.
But if we end up doing business together, you should know, that the insurance company will pay LifeCovered, a registered service provider, a commission.
You get the same price if you work with me as a broker or work directly with an insurance company.
As an advisor broker, I work with all the best life insurance companies in New Zealand because not every company can cater to everyone’s needs.