When it comes to safeguarding your family’s future, life insurance is one of the most crucial safety nets. Let’s face it: figuring out whether you need it, how much to get, and who to trust can feel like unraveling a tricky movie plot twist. The good news? It doesn’t have to be that complicated. We’ve simplified everything to help you make an informed decision about life insurance—and to show you how Quashed makes finding the best option easier than ever.
What is life insurance?
Here’s the revised version with the changes applied: At its core, life insurance is a financial safety net for your loved ones. If the unexpected happens and you’re no longer there, a life insurance policy provides a lump sum payment to your chosen beneficiaries. This money can help with:
Covering everyday expenses (e.g., groceries, bills).
Paying off major debts, like a mortgage.
Funding your children’s education.
Covering funeral and medical costs.
In simple terms, life insurance ensures your family’s financial security—no matter what life throws their way.
Do I need life insurance?
New Zealanders are among the most underinsured in the developed world.
According to the Financial Services Council (FSC), only 41% of Kiwis have life insurance, and a staggering 4 in 5 lack income protection insurance. This gap leaves households financially vulnerable, especially if the primary income earner is unable to work due to sickness, disability, or death.
Imagine you’re a young parent in Wellington with a $400,000 mortgage and two kids under five. Without life insurance, your partner might struggle to cover the mortgage, school fees, and daily expenses. That’s why life insurance isn’t just about planning for the worst—it’s about ensuring financial security for you and your family.
How much life insurance should I get?
Now that you understand why life insurance is important, the next question is: how much do you actually need? The answer depends on your individual situation. Here are some key factors to consider:
Your debts: Include your mortgage, credit cards, and personal loans.
Income replacement: How much would your family need to replace your income for 5–10 years?
Future expenses: Consider education costs or major life milestones for your kids.
If you’re unsure, a common rule of thumb is to aim for 5–10 times your annual income. The good news? Quashed can help you calculate the right amount based on your unique circumstances, taking the guesswork out of the equation.
What should you look for in a life insurance policy?
When comparing life insurance policies, it’s important to focus on these key factors to ensure the policy meets your needs:
Coverage: Does the policy cover essential situations like trauma, terminal illness, or accidental death? Make sure it aligns with your specific concerns and financial goals.
Flexibility: Life circumstances change—can the policy adapt? Look for options that allow you to adjust your coverage as your needs evolve, such as when you buy a home or have children.
Premiums: Are the premiums affordable within your budget? Determine whether the policy offers level premiums (fixed over time) or stepped premiums (which increase with age) to suit your financial planning.
Reputation of the provider: Does the insurer have a strong record of paying claims? Research reviews, ratings, and claim statistics to ensure you’re working with a trusted provider.
Taking the time to understand these aspects will help you choose a policy that provides both financial security and stability. For more tips, check out our blog.
How Quashed makes life insurance simple
We know insurance can be overwhelming, so we’ve made it our mission to simplify the process.
Here’s how Quashed helps:
Compare policies in one place: Browse options from leading insurers, all in one easy-to-use platform.
Key details at a glance: No jargon—just the essential info to help you decide with confidence.
Easily explore options: Find policies that align with your budget and coverage needs.
Save time and effort: Compare policies side by side in minutes—no need to search multiple sites.
Perks: Some insurers offer extras like discounts on gym memberships and wellness programs.
Ready to get started?
Life insurance isn’t just a policy—it’s about protecting what matters most to you and your family.
Whether you’re starting out or planning ahead, the right cover can make all the difference.
Sign up now and start comparing life insurance policies with Quashed.
Further reading
Want to dive deeper into life insurance? Here are some good reads:
Life Insurance Through Our Life Stages: Discover how insurance needs evolve over time.
Choosing Life Insurance Providers: Compare NZ’s top insurers & find the right fit.
How to Choose Life Insurance: Key considerations in choosing life insurance.
Cost of Life Insurance: Understand what influences life insurance costs and how to make it work for you.
Save on Life Insurance: Learn how to lower premiums without sacrificing coverage.
Life Insurance Mistakes Kiwis Make: Avoid common pitfalls & maximise coverage.
FAQs
What is life insurance?
Life insurance is a financial safety net that provides a lump sum payment to your beneficiaries if you pass away. It helps cover:
Mortgage and debt repayments
Funeral and final expenses
Income replacement for dependents
Future financial support for family members
How does life insurance work?
When you take out a life insurance policy, you:
Choose a sum assured (payout amount).
Pay regular premiums (monthly or annually).
Your beneficiaries receive a payout if you pass away while covered.
Some policies include optional extras, such as terminal illness cover, which allows early payouts in certain cases.
Do I need life insurance?
Life insurance is important if you:
Have dependents who rely on your income
Have a mortgage or other significant debts
Want to leave financial support for family or loved ones
Need funds to cover funeral and estate costs
If you are single with no financial obligations, you may not need life insurance. However, income protection or trauma insurance could be worth considering.
What are the different types of life insurance?
The main types of life insurance in New Zealand include:
Term life insurance – Pays a lump sum if you pass away within the policy term.
Trauma insurance – Covers specific serious illnesses or injuries.
Income protection insurance – Replaces a portion of your income if you cannot work due to illness or injury.
Choosing the right type depends on your financial responsibilities and future plans.
How much life insurance do I need?
The right amount of cover depends on your financial situation. Consider:
The size of your mortgage or other debts
Future income needs for your family
Funeral and estate costs
Education expenses for children
A common rule of thumb is to insure for 10 times your annual income, but it’s best to tailor coverage to your specific needs.
This article provides general information only and does not constitute insurance or financial advice. Insurance policies vary between providers, and you should check with your insurer or a licensed adviser for guidance specific to your situation. For full details, refer to Quashed’s terms and conditions.
