Personal insurance for New Zealand home buyers
Life insurance
If you pass away or are diagnosed with a terminal illness while the mortgage is still unpaid, your family will be left to manage repayments on a reduced income.
In cases like these, life insurance pays out a lump sum. This can be used to:
- repay the mortgage so your loved ones can stay in their home
- cover your loved ones’ ongoing living costs
- fund your dreams for them, such as your children’s education or your partner’s retirement.
Adding cover for critical illness and permanent disability
Note that standard life insurance plans do not pay if you suffer a critical illness (unless it’s terminal) or permanent disability. If you want protection for scenarios that could affect your ability to work and keep up with home payments, consider getting trauma insurance and total permanent disability (TPD) cover. These can be set up as:
- standalone covers: This option preserves your full life insurance even if you make a trauma or TPD claim, though it typically costs more.
- accelerated benefits alongside your life insurance: This option is more affordable, but any trauma or TPD claim reduces your total life cover and leaves less funds available to repay the mortgage if you pass away.
Income insurance and mortgage protection insurance
Life, trauma, and TPD insurance pay lump sums for death and many critical health conditions, but they don’t cover several situations that could stop you from working. For example:
- Serious injury with recovery expected: You’re badly injured in an accident and can’t work for several months
- Extended illness that isn’t critical: You develop a medical condition that keeps you off work for several months, but you aren’t covered by trauma or permanent disablement plans
- Mental health-related time off work: Severe depression, anxiety, or another mental health condition prevents you from working.
Income insurance and mortgage protection provide monthly payments if illness or injury stops you from working, even temporarily. Income insurance is typically calculated as a percentage of income, while mortgage insurance can be based either on your income or mortgage repayments.
You can get one of these plans or combine them to maximise the benefits you receive during health crises.
Get the right insurance support when buying a home
There’s no one-size-fits-all approach to insurance when buying a home. The right cover depends on your income, mortgage, personal circumstances, and how much financial protection your household would need if something unexpected happens.
Expert guidance can help you make informed decisions without over- or under-insuring.
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 and quotes, 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 personal cover 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.
