AIA is one of the largest insurance companies in Asia-Pacific region and New Zealand’s largest life insurance provider. A brand name that is growing and has certainly accelerated since the acquisition of Sovereign in 2018. AIA operates largely via the adviser market, meaning many of their customers interact via an intermediary.
But AIA has a new product on the market for Kiwis’; an easily accessible basic insurance policy for life, mortgage and rent cover that can be purchased online targeting those new to Life insurance.
We’ll take a dive into AIA and their new ‘Starter’ plans in this article as well as discuss purchasing life insurance online.
What is AIA Starter?
AIA Starter is a family of plans offered directly by AIA which can be purchased online. The three plans are:
AIA Healthy Starter (rent cover)
AIA Starter Life (life cover)
AIA Starter Life Plus (rent/mortgage and life cover)
You can think of Healthy Starter as a type of income protection insurance. Should you become unable to work, you will receive money to help you cover some essential expenses (such a rent or mortgage repayments).
AIA Starter Life is essentially life insurance. You can choose a level of cover from $100,000-$300,000. This amount would get paid out to your family in the event of your death.
Starter Life Plus is a combination of Healthy Starter and Starter Life. It provides life cover and rent or mortgage cover.
This allows Starter customers to purchase different types of cover separately or as a complete package for greater flexibility. All plans come with AIA Vitality Starter and optional private Specialist and Diagnostic Testing cover.
What’s great is that you can get an online quote in a matter of minutes, and the full application can be completed in around 10 minutes.
Who is AIA?
AIA is a Hong Kong-based insurance corporation specialising in life cover. In New Zealand, they typically operate via advisors such as KiwiCover or directly through their own advisory business. If you were previously a customer of Sovereign you probably already know that AIA bought out the New Zealand life insurance provider back in 2018. Since then, they’ve rebranded Sovereign Life Insurance into their own life cover advisor.
Who is AIA Starter For?
AIA pitches AIA Starter as perfect for those new to the world of life insurance. Their hope, according to Insurance News.com.au, is to help close the ‘insurance gap’ in New Zealand. The insurance gap essentially refers to the percentage of people who are unprotected if things go pear-shaped financially. In New Zealand this is around 71%.
By offering a streamlined, low-cost and online-only policy AIA is hoping to appeal to those Kiwis currently without life cover.
How much does AIA Starter cost?
AIA quotes their plans as starting at $5.65/fortnight for rent cover, $5.90/fortnight for life cover and $9.66/fortnight for both. To get a better idea of pricing, we’ve obtained some quotes for different AIA Starter policies.
AIA Starter Life:
For a 30 year old male, working professional earning under 100k a year looking for $200,000 of life cover, AIA Starter life would cost $11.66/fortnight.
AIA Healthy Starter:
For the same person as above, seeking rent cover of $2,000 per month for 6 months (with a waiting period of 4 weeks), AIA Healthy Starter would cost $11.35/fortnight.
AIA Starter Life Plus:
For the same person as above, AIA Starter Life plus would cost $19.96/fortnight.
AIA also offers an optional add-on for specialist and diagnostic testing for medical conditions. This add-on will cover the cost of eligible private specialist appointments and diagnostic tests, up to $5,000 per year. It won’t cover any costs associated with further treatment and routine screening. For reference, this would bring the fortnightly cost of AIA Starter Life to $27.45/fortnight and Starter Life Plus to $36.07/fortnight.
AIA Vitality
AIA Vitality Starter is included with all AIA Starter plans. AIA Vitality is a health and wellbeing programme run by AIA to encourage customers to keep fit and healthy by combining a discount and rewards programme.
The idea is that through free and discounted assessments, Vitality customers can identify unhealthy practices and areas of concern then work to improve them. Then, customers set goals to achieve this. The big incentive are the rewards. These come in two forms:
$5 gift vouchers can be earned weekly by tracking steps, heart rate and calories. These can be spent at small number of major brands.
A 10% cash-back can be earned by collecting ‘points’. You collect points by completing health check-ups and hitting goals.
Let’s return to our 25-year-old-male looking to take out a life insurance only policy with AIA Starter. If he were to earn the entire cash-back, it would effectively drop his fortnightly premium to $10.49. Add on the potential $5/week in gift vouchers he could earn, and the policy essentially pays for itself.
You’d have to seriously consider how likely you are to attain these full-rewards and how beneficial the vouchers are to you personally, but it is easy to see how the benefits of Vitality can stack up.
Non-AIA Starter customers can also join AIA Vitality, but it costs $11.50/month.
Why should you buy Life Insurance?
Life insurance is a funny type of insurance because it pays out in the event of your death (in some cases you can receive an early payout should you fall terminally ill). This can also make it a sensitive topic to consider for some. But all this doesn’t make it any less important than any other form of insurance cover, because it’s about protecting the most valuable asset you have: those you care about.
Essentially, if you should pass away your life insurance provider will payout a lump sum to your family. In the quotes we obtained above, this would be $100,000 but you can choose the cover that suits you (up to $300,000 for AIA Starter plan). The idea is this money will cover funeral costs and help ensure your loved ones are financially stable in the unfortunate event of your passing.
It’s not the most pleasant of topics, but it is hugely important that you consider taking out a life policy. This is especially the case if you are your family's main provider. As the old saying goes, “hope for the best, plan for the worst”.
You can read some common Life Insurance FAQs here, or our Ultimate Guide to Life Insurance blog post here to learn more!
Other online life insurance providers
Online insurance policies have taken off in recent years. And for good reason. Quick and easy to access insurance, without the pressure and time constraints of having a person on the phone or in your living room is ideal for some. Cutting out brokers and other middlemen allows providers to keep costs down and offer simplified, streamlined insurance policies. This typically works better for people with simple insurance needs. But if your needs are more complex, it could be a good idea to get professional advice.
We’ve already discussed two alternatives in this article, AA and Southern Cross. Other providers worth considering include Cigna Life and Pinnacle Life. To see how providers compare we’ve priced up comparable policies with $200,000 of cover.
Provider | Fortnightly premium |
$11.66 | |
$9.92 | |
$10.00 | |
$8.67 | |
$10.23* |
Notes: Pinnacle quotes $15.60/month - we converted this to fortnightly for comparison purposes. These quotes are for the same individual as earlier, a 30-year-old male.
Keep in mind that many providers have minimum monthly premiums or minimum levels of cover of $150,000 and above. This makes AIA Starter ideal for those looking for smaller amounts of cover.
Key advantages of AIA Starter
Southern Cross and Pinnacle Life both offer a form of income protection insurance, but these differ from AIA’s rent/mortgage cover insurance. Pinnacle Life offers traditional income protection, paying out either 60% or 75% of your income whilst Southern Cross’ offering is a lump sum payment of $20,000-$300,000. These contrast to AIA’s policy, which provides monthly payouts intended to cover rent/mortgage (but can be used as desired).
This makes AIA’s income protection offering more streamlined and simple, but less comprehensive. You’ll likely need savings to cover other expenses. For example, our 30-year-old would be paying around $16.03/fortnight with Pinnacle for 60% cover on an income of $80,000 per year ($4,250 worth of cover per month). So AIA’s offering is cheaper, but with less cover.
The key advantages of AIA’s offerings are that they are simple, easy to purchase and provide many of the ‘must-haves’ (such as a form of income protection) as well as some nice extras (such as Vitality).
If you’re after a more comprehensive set of plans, you’d be better suited with a different provider.
Final thoughts
Life insurance can be a complicated and sensitive topic. No one likes to think about those ‘what-ifs’, but it’s important to be prepared. If you’re new to the world of life insurance, purchasing it online could be a good option. Several low-cost plans exist, including AIA Starter, which are worth exploring.
Still a bit uncertain? Quashed can put you in touch with an expert adviser to help you make the right decision! Make sure to check out our guide to life insurance to help you work out the best path.
