Life Insurance New Zealand Style
Life insurance New Zealand style isn’t radically different than the life insurance offered in other countries, such as countries like the UK, Canada, Australia, and the US. There are a few types of insurance that can be purchased elsewhere that one might not find in New Zealand, but for the most part the main differences are based on terminology. For example, a Kiwi will purchase life cover insurance, while an American purchases live coverage insurance. The terminology differs, but the policies would be similar. Whole Life Insurance in New Zealand is called Straight Life in the US. Both policies have a cash value feature. In New Zealand, a separate policy, called Endowment Life Insurance, offers a cash value feature that can grow to the full amount of the death benefit, something that is usually not available in American policies.
What then are the major types of life insurance that New Zealanders can choose from?
Term Insurance is one of the more popular types of life insurance New Zealand resident’s purchase. As the name implies, the insurance policy is only in force for a specified length of time, and the policy expires at the end of that time. The length of a term life policy is often tied to a person’s age. When you reach the specified age, the policy expires. If you die before reaching the expiration date, your beneficiary receives the full benefit. If you live beyond the expiration date, the benefit ends, as does the need to make payments on the premium.
Permanent Life Insurance, on the other hand, remains in effect until the policyholder dies, at which time the beneficiary receives the full benefit. The amount periodically paid on the premium remains constant throughout the life of the policy, and a permanent policy can also have a cash value provision.
There are actually three different types of Permanent Life Insurance. There is Whole Life and Universal Life, the main difference between the two is the way in which the cash value is calculated and paid out. The third type, Endowment Life, mentioned previously, allows the cash value to grow until it equals the amount of the death benefit itself. Since the payout is significantly higher, Endowment Life premiums are significantly higher as well.
Accidental Death Insurance is the least expensive of the different types of insurance, in part because of its limitations. Benefits are payable only in those instances where a death is due to an accident. If one dies for health reasons, or from natural causes, this type of insurance will not pay any benefits. Accidental Death Insurance policies are particularly attractive to young married couples since a death is more likely to be the result of an accident than due to health issues or natural causes.
We can provide any or all the major types of life insurance New Zealanders require. Visit us for more information and/or a free online quote. We’re here to help and so happy when we’re able to do so.