What is Premium Holiday in life Insurance?
A Premium Holiday is a built-in feature of some life insurance policies that lets you take a break from paying premiums, without losing your cover.
You can usually apply for a premium holiday if:
You’ve had the policy in place and paid premiums for at least six months, and
One of the following happens:
You lose your job
You’re declared bankrupt
You face serious financial hardship
Your household income drops by 20–30% or more
It’s a practical safeguard for tough times.
None of us can predict when we’ll need to make a claim. That’s why it’s so important to keep your cover active even if things get financially tight.
But life throws curveballs. Redundancies happen. Income drops. Bills stack up. And that’s when the Premium Holiday can make a real difference.
It’s there to help you stay protected through unexpected events, just like it did for thousands of Kiwis during the COVID-19 outbreak.
When can I apply for Premium Holiday
Generally, you can suspend your cover if your policy has been in force and paid for at least 6-12 months and you suffer financial hardship.
Get in touch with us to hear about your policy-specific requirements.
Other Options to Make Cover More Affordable
Several options may be available to you to help make your cover more affordable:
- Premium Holiday – a built-in benefit that allows customers to stop paying premiums for up to six months if they’re unemployed or experiencing financial hardship. Claims are still able to be made during this time.
- Premium and cover suspension benefit – you can suspend your premiums and cover for a maximum of 12 months. If the cover is suspended, you cannot claim any benefit under that cover while it is suspended.
- Premium Freeze – allows customers to freeze their stepped premium on lump sum covers for 12 months. This option reduces the lump sum benefit and applies from the policy anniversary.
- A mixture of stepped and level premiums – options are available to suit long-term cover needs while matching short-term pricing needs.
- Restructuring Trauma cover – an option to decrease premiums while still providing cover. For example, some Trauma Cover can be converted to a more affordable option providing less cover.
- Convert Trauma Cover to Cancer Cover – Another option is converting Trauma Cover to Cancer Cover, which has the same policy definitions but does not provide cover for other conditions.
COVID-19 Update: Supporting you through financial hardship
In response to COVID-19 and increasing health and financial stability fears, people are looking to insurers for reassurance.
Here’s a short breakdown