Types of insurance in NZ: What cover do you really need?

Health insurance

Health insurance takes the worry out of covered healthcare services and private hospital expenses, especially costly surgeries and medications, allowing you to focus on getting better without stressing about the bill.

• Pays for major healthcare costs: Your health insurance may cover surgical and non-surgical procedures, hospital stays, specialist consultations, cancer care, and non-Pharmac-funded drugs.
• Quicker and earlier care: Health insurance helps you access private care faster and earlier. In New Zealand’s overstretched public system, waiting times often reach several months and specialist referrals can be declined. With private cover, you receive treatment sooner, before your condition becomes more serious.
• Choose your care: You have more control over your healthcare journey, choosing the specialist you trust, the hospital you prefer, and the treatment approach - especially helpful if you need non-funded medications or treatments not available in New Zealand.
• Protect your finances: You have a safety net to protect you from facing devastating medical bills that could destroy your financial security. Consider these private treatment costs:
  • Cancer chemotherapy drugs: $15,000 to $400,000 (for Pharmac and non-Pharmac-funded drugs)
  • Spinal surgery: $30,000 to $250,000
  • Heart valve replacement surgery: $80,000 to $100,000
  • Hip replacement: $22,000 to $40,000

Without insurance, a single serious diagnosis could force you to sell your home, drain your retirement savings, or go into debt for life-saving treatment. With comprehensive health cover, many major expenses are paid by your insurer, preserving your financial security when you're most vulnerable.

Tailored cover options

Customise your plan to fit your needs and preferences. You can:

• get optional add-ons for dental cover, GP and nurse visits, specialist and mental health consultations, prescription drugs, optical costs, and alternative health treatments
• increase your benefit cap for non-Pharmac-funded drugs
• get family health insurance to protect your entire family, while customising cover for each member
• get visitor health insurance for loved ones if they hold an eligible visitor visa or work visa. 

Need help choosing health cover? Talk to Policywise for personalised advice or visit our health insurance guide for a comparison of the best medical insurance plans and quotes from New Zealand’s most trusted insurers.

Life insurance

Life insurance provides a lump sum, tax-free payout if you pass away or are diagnosed with a terminal illness, typically with a life expectancy of 12 months or less.

• Financial security: Life insurance helps your family avoid financial hardship after you’re gone. The payout can go towards your rent or mortgage, living expenses, children’s education, and debt payments, lessening financial strain during the grieving process.
• Cover for end-of-life costs: Upon the insured’s death, insurers provide an early payment of $15,000 to $25,000, helping loved ones cover funeral expenses. In case of a terminal illness diagnosis, several plans provide an early payment, releasing either a portion or the full sum insured. 
• Future planning: Preserves plans you’ve made with your partner, like a university fund for your children or retirement savings.

Customise your cover

• Choose your sum insured: Select a sum insured based on your family’s financial needs. If you have significant debts and several loved ones who depend on your income, consider getting a higher sum insured.
• Get life cover as a standalone policy, or combine it with disability or critical illness cover as accelerated benefits.

See our life insurance comparison guide or get advice from Policywise to find the best life cover for your needs.

Trauma (critical illness) insurance

Trauma insurance provides a lump sum payout upon diagnosis of a covered condition, offering financial relief so you can focus on your recovery. In New Zealand, where over 28,000 people are diagnosed with cancer and over 9,500 suffer strokes annually, this cover can be vital support.

• Fills in gaps left by ACC: The ACC covers accidental injuries, but not conditions like cancer, dementia, stroke, heart attack, or paralysis. Trauma insurance softens the financial impact of these and several other health issues that have long-term or life-long repercussions.
• Financial relief: The lump sum benefit helps replace income the patient and their family carers lose while unable to work. This means they have funds for living expenses, debt repayments, and medical costs. For instance, up to 30% of stroke victims in New Zealand are aged under 65. Trauma cover can protect working-age individuals from the long-term financial impacts of suffering a stroke. 
• Supports recovery: Trauma insurance provides a buffer to manage the unplanned costs of treatments, rehabilitation, home care, and other medical expenses associated with critical illnesses or injuries.
• Flexible use: Use the payout for whatever you need most, whether it’s specialist care, home modifications, or debt repayment to reduce family stress.

Flexible options

• Purchase trauma insurance either as a standalone policy or an accelerated benefit added to your life insurance, reducing your life cover upon a trauma insurance claim. 
• Some plans offer add-ons that allow you to reinstate your trauma cover or buy back your life cover (for accelerated trauma cover), usually following the 12 months from the date the claim was paid.
• Some policies include child trauma cover as a built-in benefit under a parent’s trauma insurance, providing up to $50,000 if your child suffers a covered medical condition or needs surgery. 

Need help comparing plans? A Policywise adviser can help you find the best trauma insurance in New Zealand that fits your situation and budget.

Total permanent disability (TPD) cover

A permanent disability can make daily activities more challenging, if not impossible, without external support. 

Disabled individuals also face significant challenges in terms of earnings and employment. June 2024 labour market statistics revealed that the unemployment rate for disabled individuals was more than double that of non-disabled people and their median weekly income was significantly lower than the earnings of non-disabled individuals. 

TPD cover provides a tax-free lump sum payout if a total and permanent disability prevents you from ever returning to your occupation, whether that’s your job, business, studies, or unpaid work, like homemaking. 

• Financial support: For example, if a spinal injury leads to permanent paralysis that prevents you from returning to your job or getting any work that’s appropriate for your education and work experience, disablement insurance helps pay for living costs and medical expenses. 
• Partial disability benefits: Many TPD policies pay a portion of the sum insured if you suffer a permanent partial disability, such as losing sight in one eye.
• Lifestyle adjustments: The payout funds ongoing medical expenses, home or vehicle modifications, hiring a carer, or replacing a family caregiver’s lost income. For instance, you might need money for wheelchair ramps, widened doorways, bathroom modifications, plus home care. 
• Professional support: Several TPD plans include counselling benefits for psychologist or psychiatrist consultations to help you cope with major life changes. You can also get reimbursements for professional financial and legal advice on how to use your TPD claim.

Flexible plan options

• Choose the type of TPD cover 
  • Own occupation: Pays if you can’t return to your pre-disability occupation, even if you can work in a different profession
  • Any occupation TPD: Pays if you’re unable to perform any work suited to your education, training, or experience
  • Modified TPD: For those with no paid employment or who don’t qualify for the two covers above, modified TPD pays under specific circumstances, such as loss of sight, limbs, cognitive ability, or inability to perform at least two daily living activities without physical support from another person.

• Choose how to get TPD cover
  • standalone insurance plan
  • accelerated benefit, where a TPD claim reduces your life cover amount. Several plans offer a buy back option so you can restore your life cover benefit 12 months after a TPD claim 
  • optional benefit added to critical illness insurance.

To know more about TPD insurance benefits, read our disablement insurance comparison page or contact Policywise to get personalised advice and quotes.

Income protection insurance

Income insurance offers solid financial support, replacing up to 75% of your income if you can’t work due to a long-term injury or illness.

Monthly payments start after your chosen waiting period (from 2 weeks to 2 years) and continue until the earliest of the following: you go back to work, the benefit period (1-5 years or up to age 65 or 70) ends, your cover stops, or you pass away.

• Replaces lost income: Income protection ensures you can continue providing for your dependants and paying for essentials, like rent, groceries, and medical bills, even when an illness or injury prevents you from earning an income. For example, if you earn $5,000 monthly and can’t work for a year due to a serious illness, you’d lose $60,000 in wages. Income protection can provide up to $3,750 monthly (or a total of $45,000 less benefit offsets), helping your family manage expenses during your recovery.
• Covers more than what ACC could: Having income cover helps you get financial support even if ACC doesn’t cover your condition. While injuries related to accidents are covered by ACC, illnesses like cancer and heart disease and ailments associated with ageing are not. Additionally, some patients have experienced delayed or even declined ACC claims because of technical or processing errors, legal issues, or misdiagnoses.
• Protects against financial risks: Income protection insurance safeguards against unpaid bills and loans, depleted savings, increased debt, and disrupted major goals, such as property purchases or retirement planning. It can also fund rehabilitation expenses, helping you recover and get back to work.

Flexible options

• You can get income cover as a standalone plan or combine it with mortgage protection so you can maximise the benefits of both covers.
• Many insurers offer add-ons such as redundancy insurance, cover for specified critical illnesses, total and permanent disability protection, and death benefits. 

Need help comparing plans? Policywise can help you find the best income cover, ensuring you get a personalised policy that fits your needs. 

Mortgage protection cover

Mortgage protection insurance provides monthly benefits to help you keep up with your mortgage or rent payments if you can’t work due to a disability caused by an illness or injury. 

Your mortgage cover payouts start after a waiting period (2 weeks to 2 years), and are calculated based on a percentage of your income or residential mortgage/rent payments.

Unlike income protection, mortgage protection insurance is not reduced by ACC payments and other benefits you’re receiving for the same illness or injury.

• Secures your home: Mortgage protection helps you avoid foreclosure or eviction when illness or injury halts your income. For example, if you’re paying $2,500 monthly on your mortgage and a back injury requires six months off work, that’s $15,000 in payments at risk. 
• Flexible funds: Monthly payouts can cover mortgage or rent and extend to other essentials like utility bills, groceries, or car payments. 
• Focus on your recovery: Mortgage protection lets you prioritise getting better instead of worrying about losing your house while trying to recover. Some plans also include rehabilitation or retraining support, which help you get back to work sooner or switch occupations.

Flexible options

• You can get mortgage protection cover as a standalone plan or pair it with income protection insurance to boost monthly benefits.
• Some insurers offer add-ons, like redundancy cover, severe illness benefits, specific injury support, mental health limitation/discount, and bereavement support.

To learn which insurers provide the best mortgage insurance benefits, reach out to a Policywise adviser. They can simplify the process of comparing policies and quotes and navigating claims.

Business insurance

A business owner or key staff member’s disability, illness, or death can threaten a company’s profitability and survival. Policywise helps business owners compare insurance options that pay either lump sums or monthly benefits, enabling their company to successfully navigate challenges and sustain operations during tough times. 

• Financial protection: When a business owner suffers a heart attack or gets a cancer diagnosis, the business may lose its primary driver of sales and operations, while medical costs mount. Business insurance can help cover major company expenses, fund debt repayments, make up for lost revenue, or pay for the medical and recovery costs of the owner or key person.
• Risk mitigation: Insurance shields your business from disruptions that could hinder operations, drain your cash flow, or force layoffs or business closure.
• Business continuity: If your business depends heavily on specific individuals, their sudden absence due to death, disability, or critical illness could disrupt workflows. Business insurance can help you hire temporary staff, train replacements, or fund ownership transfers. 
• Peace of mind: With the right insurance cover in place, you can focus on growing your business, knowing you’re prepared for the unexpected.

Finding the right plan

Building and running a business takes a lot of hard work, and your enterprise deserves the best financial protection. Policywise can help you compare business insurance plans or find the best key person cover. 

Employee insurance (group cover)

Offering employee or group insurance as part of a benefits package can give your business a competitive edge in recruitment and retention, increasing morale and reducing absenteism. 

Group cover protects your workers from the financial repercussions of serious injuries, illnesses, and death. Employees can also opt to include dependants in their policy, to help ease their worries during difficult times. 

Employee insurance benefits vary by policy type: 

• Group life insurance: offers a lump sum upon an employee’s death or terminal illness diagnosis (with a life expectancy of 12 months or less).
• Company health insurance: pays for covered medical costs, such as private hospital surgeries and cancer treatments. Some group plans also cover pre-existing health conditions, which may be permanently or temporarily excluded if your employees take out an individual policy.
• Group income cover: provides monthly payments if your employee can’t work due to a serious illness or injury. 
• Group trauma insurance: pays out a lump sum benefit if your employee suffers a condition listed in the policy, such as cancer, heart attack, stroke, major organ transplant, total blindness, and more.
• Group total and permanent disability insurance: provides a lump sum benefit if your employee suffers a permanent disability that prevents them from going back to their job or taking on any suitable role.

Contact Policywise to help you evaluate group insurance plans from New Zealand’s best insurers, and customise a cover that’s perfect for your team. 

Why working with an insurance broker is a smart move

Brokers know the ins and outs of insurance and can help you choose the best cover, whether for yourself, your family, or your business. 

Here’s why working with a highly rated insurance adviser like Policywise is a smart move:

• Specialists in life, health, and disability insurance: We specialise in these types of insurance covers, so you benefit from our knowledge and experience.
• Time-saving insurance comparison and access to more options: The Policywise team does the legwork for you, comparing policies from New Zealand’s most trusted insurers to find the best fit for your needs and budget. 
• Find better deals and discounts: We help you explore available discounts, package deals and market options, securing comprehensive cover for you at a better price. 
• Personalised advice and expert insight to identify gaps: Policywise breaks down complicated terms and phrases, saving you the headache of deciphering fine print on your own. By getting to know your personal or business needs, we can provide tailored recommendations and help you spot and address insurance gaps.
• Support that lasts: Our job doesn’t end when you sign the dotted line. We’re here for the long haul, advocating for you and helping with claims to make tough moments easier. As your life evolves - whether you’re getting married, having a child, entering a higher income bracket, taking out a mortgage, starting a new business, or going through other major changes - we can regularly review your policies to keep your cover current.

How Policywise can help

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 insurance needs 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.