How much does life insurance cost in New Zealand?

How are premium rates determined?

Providers usually charge life insurance premiums based on the policyholder’s unique profile. The most common factors insurers consider when determining premiums are the following:

•  Age: Life expectancy is a major consideration for insurance providers because it determines the risk of them having to pay out on a policy. Since younger people generally live longer, they tend to have lower premiums, while older people often face higher premiums due to shorter life expectancy.
• Gender: Statistically, females tend to live longer than males. For this reason, males are frequently subject to higher premiums.
• Type of cover: Some life insurance policies offer more protection than others. Examples may include payouts for medical costs, accidental death, critical illness, income protection, or total permanent disability. With this increased protection often comes an increase in premiums.
• Amount of cover: Being insured for a larger amount means a greater burden for providers when the time comes for them to pay out on a policy. Hence, premiums increase along with the insured amount.
• Lifestyle: Lifestyle choices such as smoking, vaping, alcohol consumption, and risky hobbies or activities - e.g., skydiving or scuba diving - increase the likelihood of health issues and death. Consequently, providers may require individuals with certain lifestyles to pay higher premiums.
• Medical history: Sometimes, prior illnesses lead to further ailments later. Also, some individuals are predisposed to developing certain conditions if they have a family history of the disease. In these cases, providers may apply a loading - an increased premium to compensate the insurer for the increased risk.

How much does life insurance cost?

^{*Based on quotes from AIA, Asteron Life, Chubb, Fidelity Life, and Partners Life.}

The average premium for a life insurance policy in New Zealand varies depending on the age of the insured.

Generally, younger individuals pay lower premiums as they are healthier and have a longer life expectancy. Premiums tend to increase as policyholders age, especially once they reach their mid-50s and 60s, due to an increased risk of illness or death.

For example, life insurance costs for a 30-year-old in New Zealand with a death benefit of $500,000 start at $11.90 fortnightly. For 40-year-old individuals, fortnightly premiums start at $17.57

Be aware that these are just averages, and individual factors, such as your health, occupation, and lifestyle, can significantly impact the cost of your life insurance.

In New Zealand, life insurance premiums also tend to be higher for males than for females.

For example, a 30-year-old female can expect to pay around $11.90-$12.90 per fortnight for a $500,000 life insurance policy, while a 30-year-old male can expect to pay around $17.83-$18.08 per fortnight for the same policy.

Similarly, a 40-year-old female can expect to pay around $17.57-$19.31 per fortnight for a $500,000 life insurance policy, while a 40-year-old male can expect to pay around $20.81-$21.54 per fortnight for the same policy.

While gender has a significant effect on policy premiums, bear in mind that pre-existing medical conditions and high-risk behaviours can also impact the cost of life insurance.

It is a good idea to compare life insurance policies from different providers. Policywise can help you work out how much your premiums would cost based on your age, gender, health, and lifestyle. Book a 5-minute callback with us for in-depth quotes and a recommendation tailored to your needs.

How can I lower the cost of my life insurance premiums?

Here are some ways to potentially lower the cost of your life insurance premiums:

• Quit smoking and vaping: Smokers and vapers typically pay more for life insurance due to the increased health risks associated. But even if you are currently a smoker or vaper, you should still consider taking out cover. Quitting smoking and vaping can not only improve your health but also potentially lower your life insurance premiums to the non-smoking rates.
• Cut down on drinking: Excessive alcohol consumption can have negative effects on your health and may result in higher life insurance premiums.
• Get in shape: Maintaining a healthy BMI and exercising regularly can lower your risk of certain health conditions, which can translate to lower life insurance premiums.
• Consider major life changes: Major life events, such as marriage, buying a home, or having a child, may affect your life insurance needs and could also impact your premiums. Reviewing your cover periodically and adjusting it as needed can help ensure you have adequate protection at a reasonable cost.
• Look for discounts: Some insurance providers offer discounts if you are a non-smoker, follow a healthy lifestyle, or have multiple policies with the same provider. Be sure to get in touch with Policywise about any discounts that could be available across different insurers.

By improving your health and making smart cover decisions, you may be able to lower your life insurance costs and ensure that you have adequate financial protection for yourself and your loved ones.

Can you afford life insurance?

To find an affordable policy, check out different insurance providers and consider cover, features, and benefits. Discussing potential discounts with an adviser and adjusting your cover to fit your needs can help lower your premiums while ensuring you get the best value for your policy.

Still got questions or need help? Get some advice from one of our licenced Policywise advisers to help you find the most cost-effective deal with trusted life insurance companies in New Zealand.

Policywise: your partner in making wise insurance decisions

Policywise is a 100% free service which tells you which health, life, and disability insurance provider best fits your needs. We offer fast, comprehensive, and easy-to-understand comparisons of all leading providers, and a simple summary clearly recommending which insurer is best for your situation.

Not all insurance policies are the same. Policywise can help you sort out the duds, avoid the lemons, understand the fine print and exclusions, and get the right insurance for you and your family.

We make the important decision of where to buy your insurance super easy. We’ll answer your questions, provide experienced advice, quotes, and comparisons, and manage all the back and forth throughout the application process. Taking out your cover through us means you'll have our lifetime support and claims advocacy, and we'll help you negotiate a positive outcome at claim time. We can also take care of lodging any claims on your behalf and back you up if the going gets tough.

Check out the reviews on our homepage for how other New Zealanders have found our service because now is the time to get your life insurance sorted. Give your family or someone you love the most outstanding financial support possible. Book a 5-minute callback with Policywise today; our service is fast and free.

^{Disclaimer: This article is for general information only. Nothing in this blog or on this website is intended as medical, dietary, or financial advice. Although we aim to update our content regularly, you are advised to consult a Policywise adviser, health professional, or an appropriate specialist before acting on any information herein. They can factor in your personal circumstances or preferences and help guide your decision-making process.}