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Life Insurance NZ

Everyday you constantly run the risk of harming your health and way of life, but what would happen to your loved ones if you passed away too soon? Truth be told, losing someone you care about is never easy, but the emotional challenges shouldn't have to be exacerbated by financial hardships. Even if you aren't around to care for the people you love, life insurance helps ensure that they will have financial security.

What is life insurance and how does it work?

Life insurance payment provides a tax-free lump sum payment on your death or if you are diagnosed as being terminally ill, which can help your family continue to live the life you’ve planned together.

The ideal situation is to leave your family in a position as if you were still here financially.

We are a trusted life insurance broker and one of our advisers can sit down with you and your partner, in the comfort of your home, and develop your family’s Personalised Protection Plan to determine the ideal level of Life cover you need for your family’s unique circumstances and needs.

 NZ Life Insurance FAQs

We receive a lot of questions from customers who want to make sure they're protecting their family and future selves but don't know where to begin with life cover. Fortunately, our Adelphi experts have summarised some of the most commonly asked questions we receive about life insurance policies, insurance premiums, and health issues.

Read on to learn more about the life insurance details specific to New Zealanders or contact our friendly team to receive affordable quotes from our trusted life insurance brand.

How does life cover work in NZ?


In short, life insurance works like this:

  1. An applicant considers their need for financial support in the event of death, or total and permanent disability (if they are unable to ever work again);

  2. Most commonly, life insurance specifically is designed to support your loved ones, beneficiary/ies, dependents, or funeral costs in the event of death; when someone passes away, not only are they gone, but so too is their income. In a family situation this can cause a catastrophic financial hardship. When assessing the amount of cover needed, an insurance adviser will generally look at recommending the clearing of debt, and the replacing of the key income earners income, for an agreed period.

  3. If the policy holder passes, and as long as the terms and conditions of the policy are met, the policy amount is paid out to the beneficiaries.  

  4. Lastly, the policy holder (while alive) will pay regular ‘premiums’ to maintain their policy and protection. To summarise, this simply means regular payments that the policy holder makes to maintain their insurance.


There are some pre-existing conditions which could modify the amount of or type of life insurance coverage you qualify for as well as some conditions surrounding the death of the policy holder that may prevent payout. We always recommend speaking to an insurance broker about your individual insurance needs to best support your loved ones in the event of an accident, illness, or death.

What conditions disqualify you for life insurance?

We’re careful about using the word ‘disqualify’ as we wouldn’t want any of our potential or existing customers to believe they are at fault for pre-existing conditions. That said, there are certain types of pre-existing conditions that could limit the amount and/or ability to be covered by new life insurance policies, including:

  • Cancer

  • Diabetes


  • Heart Disease

Among others. While disclosing that you have a pre-existing health condition does not automatically disqualify you from being able to obtain a life insurance policy, it may influence your policy, premiums, or coverage in the following ways:

  • Your premiums may increase

  • The amount of coverage you qualify for may be reduced

  • The type of life insurance you can buy (for example, income protection insurance versus mortgage protection insurance)

Lastly, it’s important to know that there are some circumstances that may result in end of life by which life insurance policies may not pay out to the beneficiaries as intended, including:

  • Suicide within 13 months of taking out the new policy.

  • Terminal illness related to a known but undisclosed pre-existing health condition

Among others. Like we said, having a pre-existing health condition may not prevent you from getting the life insurance protection you want and need–but it is important to work with a broker who can help you navigate the application process.

Do you have to pay tax on life insurance in NZ?

We’ll keep this one short and sweet: no, at present in New Zealand legislation dictates that the proceeds received from paid life insurance policies are usually tax-free if and when the proceeds are paid directly to an individual or an estate. These benefits are paid out to support funeral expenses and other associated costs with end of life planning, living costs, and minimise financial stress after the policy holder has passed from an ongoing illness or unexpected event.

This is the most common situation in the case of death of the policy holder when the beneficiary receives the proceeds from the insurer; however, it’s worth pointing out that with all insurance claims and policies, some subjective factors may create a unique case.

If you suspect that you, your beneficiaries, or if you are the beneficiary of a life insurance policy would fall outside of the standard individual or estate claim we highly recommend speaking with an expert insurance broker to receive professional advice and make sure you know what your tax obligations could be.

One final recommendation would be to receive financial advice at the same time. Together, both an insurance broker and financial partner can ensure that you and your family will be able to manage a challenging time should the unthinkable happen without additional money-related stress.

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