Ever caught yourself wondering why your mate pays far less for life insurance than you do? Or maybe you’re checking out life insurance for the first time and wondering how much it might cost in New Zealand? You’re not alone. Let’s be honest—understanding the cost of life insurance in New Zealand can feel like solving a tricky puzzle. But don’t worry—it’s simpler than it seems.
The real cost of being underinsured
Here’s a sobering fact: 59% of Kiwis do not have life insurance, according to a Financial Services Council report. This leaves many New Zealand families financially exposed to the unexpected.
Consider this hypothetical scenario: Emma, a 35-year-old mother of two, had $360,000 in life insurance coverage. When she unexpectedly passed away, her family faced significant financial challenges. Their $500,000 mortgage, along with childcare, education, and daily living costs, overwhelmed her partner, who had to sell their family home just to stay afloat.
This story reflects the reality for many Kiwis. While life insurance might seem like just another expense, the real question is: can your family afford not to have it?"
While this example might seem extreme, it highlights the real risk many Kiwis face. Understanding the cost of life insurance is more important than ever, especially when the unexpected can throw your finances into turmoil. So, how do premiums actually break down?
Breaking down your premium: what influences the cost?
With the risk of underinsurance in mind, it’s crucial to understand what influences your life insurance premiums. Let’s break it down so you can make informed decisions.
1. Age: the earlier, the better
Getting life insurance in New Zealand while you're young is like buying concert tickets early—you’ll get the best rates. Insurance companies love young, healthy people, so your premiums will be much lower than if you wait until your 40s. Plus, you’ll lock in coverage before life throws at curveball at you.
2. Health and lifestyle: your choices matter
Your health and lifestyle are crucial in determining premiums. Insurers assess factors such as:
Your BMI and general health,
Pre-existing medical conditions,
Your occupation and high-risk hobbies.
The smoking factor: Smoking is a key example of how lifestyle choices affect premiums. Smokers pay significantly more than non-smokers, as shown by our data:
A 30-year-old non-smoking female pays on average, $24.79 per month.
A 30-year-old smoking female pays on average $42.05 per month—that's a 51.6% difference.
That’s an extra $207.18 annually, which could otherwise cover groceries, school supplies, or even a weekend getaway.
3. Amount of cover: balancing needs and affordability
The coverage amount you select directly impacts your premiums. While lower coverage can save money upfront, it’s critical to ensure your policy covers key expenses like your mortgage, debts, and your family’s needs.
Understanding what drives life insurance premiums is key to choosing the right policy. For a deeper dive into the fundamentals, read our guide: What is Life Insurance and Do You Need It?
Now that we’ve covered the key factors that influence your premium, let’s dive deeper into how these variables stack up against each other in real terms.
What are the costs of life insurance?
Now that you know what influences your premiums, let’s look at some real numbers. Here’s what life insurance prices in New Zealand could look like for a 40-year-old white-collar professional earning $100,000 annually.
Cover Amount | Non-Smoker (Male) | Smoker (Male) | Non-Smoker (Female) | Smoker (Female) |
$250,000 | $27.4/month ($328.2/year) | $59.3/month ($712.2/year) | $24.0/month ($287.9/year) | $46.5/month ($558.1/year) |
$500,000 | $40.5/month ($486.4/year) | $95.44/month ($1,145.3/year) | $34.6/month ($415.6/year) | $74.4/month ($892.8/year) |
$750,000 | $53.5/month ($641.7/year) | $129.5/month ($1,553.6/year) | $45.4/month ($545.0/year) | $99.4/month ($1,193.0/year) |
$1,000,000 | $66.0/month ($791.9/year) | $165.2/month ($1,982.6/year) | $55.8/month ($669.7/year) | $124.4/month ($1,493.3/year) |
Source: Quashed. Note that the above costs are average life insurance costs.
What do these numbers mean for you? Let’s break it down:
Non-smokers save big: If you’re non-smoker, you’ll pay $792 per year for $1,000,000 cover. Compare that to a smoker, who forks out $1,983 per year. That’s a difference of 150%.
Women can pay less: For $1,000,000 in cover, a non-smoking woman pays $670 per year, or 15% less than a man.
Why do these costs matter? Because knowing what life insurance costs means you can plan better. It’s not about skimping or splurging—it's about finding that sweet spot where you can protect your family without overloading your budget.
So, what’s the best way to keep your premiums manageable? Let’s explore some smart strategies that can help you save while still securing the coverage you need.
Smart ways to keep your premiums down
Now that you’ve seen what life insurance could cost, you might be wondering how to keep those premiums as low as possible. The good news is there are a few simple strategies to save money while still getting the cover you need.
Start early: The best time to get life insurance was yesterday; the second-best time is today. Starting young locks in lower premiums, saving you thousands over the years.
Live a healthy lifestyle: Quitting smoking, maintaining a healthy weight, and staying active can reduce premiums by up to 10% with some insurers.
Compare your options: Researching providers can be tedious, but that’s where Quashed comes in. Compare quotes from leading NZ insurers in no time, making it easy to find the best deal.
Now that you know how to keep your premiums in check, let's take a look at how Quashed simplifies the process, making it easier to compare and find the best options for you.
How Quashed simplifies life insurance
While these tips can help you reduce life insurance costs, navigating policies and comparing options on your own can still feel overwhelming. That’s where Quashed comes in—making it simple to find the best life insurance for your needs.
Finding the right life insurance policy shouldn’t feel like writing a thesis. Quashed makes the process straightforward by allowing you to:
Compare quotes side-by-side in real time
See exactly what each policy covers
Spot special offers and discounts.
Exclusive perks: Some insurers offer discounts for healthy lifestyles or even gym memberships. With Quashed, these deals are displayed clearly, so you can make informed decisions without any guesswork.
Ready to sort this out?
Life insurance isn’t just another expense—it’s an investment in your family’s future and financial security.
Whether you’re a first-home buyer, a new parent, or planning for retirement, protecting your loved ones is priceless.
Why wait? Join over 45,000 Kiwis who’ve taken control of their family’s financial future with Quashed.
Further reading
Want to become an insurance ninja? Check out these must-read guides and blogs:
Life Insurance mistakes: Avoid the rookie errors that could cost you big time.
How to save on life insurance: Smart tips to slash your premiums without cutting corners.
Choosing the right life insurance: Your cheat sheet to finding the perfect policy.
Budget hacks for insurance: Money-saving hacks that work across all insurance types.
Average insurance costs breakdown: The real scoop on what Kiwis are paying for coverage.
Choosing a life insurance provider: Your ultimate guide to picking an insurer you can trust.
FAQs
How much does life insurance cost per month in New Zealand?
The monthly cost of life insurance in New Zealand varies depending on factors like age, health, and smoking status. For example, a healthy 30-year-old non-smoker might pay around $30–$40 for $500,000 cover, while premiums increase with age or pre-existing conditions.
How can I find the cheapest life insurance?
The cheapest life insurance policies often depend on your lifestyle, health, and coverage needs. Comparing policies from multiple providers using tools like Quashed can help you find affordable options tailored to you.
What factors affect the cost of life insurance premiums?
Life insurance premiums are influenced by factors like age, health, occupation, lifestyle habits (e.g., smoking), and the level of cover you choose. Other factors include optional extras, such as trauma or income protection cover.
How can I lower my life insurance premiums?
Ways to lower premiums include maintaining a healthy lifestyle, quitting smoking, or choosing a policy with lower cover amounts. Regularly reviewing your policy to adjust coverage to your current needs can also help reduce costs.
Does life insurance get more expensive as you age?
Yes, life insurance premiums typically increase with age due to higher risks of health issues or death. Locking in a policy early often means lower premiums over time.
Is it worth keeping life insurance if my kids are grown and my mortgage is paid?
For many, life insurance becomes less necessary once dependents are financially independent and major debts like a mortgage are paid off. Switching to a smaller policy or reducing coverage might be a smart move, depending on your situation.
Are life insurance calculators accurate in estimating costs?
Life insurance calculators can provide useful estimates based on your input, such as age and lifestyle. However, the final premium may vary depending on the insurer’s assessment and underwriting process.
Should I consider a broker for finding life insurance?
A broker can simplify the process of comparing life insurance options and may help you find tailored coverage. Independent brokers without commission incentives are often recommended for unbiased advice.
What happens if I stop paying my life insurance premiums?
If you stop paying your premiums, your policy will lapse, and you’ll lose coverage. Some policies have a grace period, so it’s important to contact your provider if you’re struggling to keep up with payments.
Does ACC cover life insurance needs?
ACC provides support for accidental death or injury, but it doesn’t offer the comprehensive financial protection of life insurance, which can cover non-accidental death and additional financial needs.
How does Quashed simplify the process?
Quashed offers real-time quotes, transparent comparisons, and access to exclusive discounts—all in just a few clicks. No more jumping between websites or dealing with confusing jargon. Want to make life insurance easier? Compare real-time quotes with Quashed today.
The information provided in this FAQ is for general informational purposes only and does not constitute financial advice. Insurance policies, coverage options, and pricing may vary based on individual circumstances and provider terms. For full details, please refer to our Terms and Conditions and consider seeking professional financial advice to determine the best solution for your needs.
