Life insurance for children in NZ: Best options for your kids

Life insurance for children

Child life insurance pays a benefit if your child or young dependant is diagnosed with a terminal illness or passes away.

You can either get a standalone policy (once your child meets the entry age) or add child cover to a parent, grandparent, or guardian’s life insurance policy. The best option depends on your budget and how much protection you want in place for your child.

Standalone child life cover

• Entry age varies by insurer – some allow cover from age 10, others from 16
• Offers greater flexibility and higher benefit limits
• Comes with its own cost, as it is a separate policy.

Child cover that’s included in your own life insurance policy

• Many insurers provide free or built-in cover for children (such as a child funeral/parent grieving benefit) 
• Others allow you to get child cover as an add-on benefit
• Maximum benefit amounts are usually lower than in standalone policies, but still provide a considerable layer of financial protection if something unfortunate happens to your child.

Finding the right solution

There’s no one-size-fits-all approach to child life insurance. Whether you’re looking for bundled life cover for the whole family or a standalone plan for your child, Policywise can help. We compare the best life insurance options, find child-focused solutions, and show you how to balance strong protection with affordable premiums. Get in touch today and let us simplify the process for you.

Alternatives to child life insurance 

Trauma (critical illness) insurance for kids and young dependants

Trauma insurance can’t take away the emotional toll of seeing your young dependant suffer a serious illness, but it can ease the financial strain so you can focus on helping them recover.

It pays a tax-free lump sum if your child is diagnosed with one of 40+ serious conditions listed in the policy and survives several days after diagnosis. Covered illnesses and situations may include cancer, leukaemia, terminal illness, serious accidental injury, and loss of limb, sight, hearing, speech, or independent existence. 

The benefit can help fund private treatment, specialist appointments, and other medical costs. It can also replace your income if you need to take an extended time off work to support your child.

Many trauma insurance plans require an entry age of 16, but some allow you to insure kids and newborns under a parent’s policy. 

Ways to get trauma cover for your child

• Cover through a parent’s trauma insurance plan: Some adult trauma policies automatically include limited cover for children, giving a basic level of protection without extra cost. Child trauma cover may also be purchased as an add-on to a parent’s policy, providing greater flexibility and higher benefit limits.
• Separate child trauma policy: Once your child reaches the eligible entry age, you can set up a standalone trauma plan, or combine it with life insurance for wider protection against critical conditions, terminal illness, and loss of life.

Disability insurance for young dependants

Disability insurance pays a lump sum benefit if your child suffers a total or partial disability that meets the policy’s definition. These funds can help with long-term care, mobility aids, or adapting your home to meet your child’s needs. It can also provide income support if you need to reduce your working hours to care for them.

Standalone disability cover is available once a child turns 16. Alternatively, you can add children’s cover to your own policy. This add-on can protect your young dependants against serious conditions, like permanent disablement, and may allow you to increase the child’s cover sum insured.

Things to consider when getting child life insurance

Family and budget priorities

• Adult vs child cover: If your budget is tight, it makes sense to get cover for the working parent or caregiver first. The right insurance plan can provide vital financial support and help secure your children’s future if you are diagnosed with a terminal illness, become disabled, or pass away.

• Consider income protection: Income protection insurance and mortgage protection pay a monthly benefit if you can’t work due to illness or injury, helping you continue to pay for your children’s needs and ongoing living costs. Some even cover the cost of extra childcare while you recover.

• Child health insurance: If your priority is protection against major medical costs, look into health insurance plans for kids. Health insurance gives faster access to treatments and specialists and covers expensive private hospital care, surgeries, and mental health support, with some plans even covering newborns’ pre-existing conditions.

Growing your savings

Insurance isn’t the only way to prepare for the unexpected. 

• Building an emergency savings fund gives you quick access to money for the unexpected, such as medical expenses, extra childcare, or even funeral costs if the worst happens.
• While KiwiSaver is mainly designed for retirement or buying your first home, it can sometimes be accessed early for medical treatment, palliative care, or funeral costs for yourself or a dependant. 

Savings alone often can’t provide the same level of protection as insurance, but together they give you security and flexibility. A Policywise adviser can help you build the right mix of savings and insurance to protect your children and young dependants, now and in the future. 

Things to keep in mind before you buy

• Check the small print. Look carefully at exclusions, waiting times, and benefit limits so you know exactly what’s included in your child’s policy.
• Apply early. Getting cover while your child is healthy usually makes approval quicker and simpler.
• Don’t compare alone. Sorting through insurers can be tricky. Policywise can walk you through the options and help you strike the right balance between protection and cost.

Smarter child life insurance choices with Policywise

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 kid's life insurance sorted. Give your child the most outstanding support possible. Book a 5-minute callback with Policywise today; our service is fast and free.