Written by · Reviewed by Smiths Insurance & KiwiSaver — licensed Financial Advice Provider (FSP712931) · Last updated 2026-10-20

Can you borrow against life insurance in NZ?

Generally not on the life and funeral cover sold to new customers today. Momentum's Quick Life says it "does not build up any cash or surrender value", and AIA's Living policy wording says the same. A policy loan needs a savings component. Resolution Life says its closed whole of life and endowment policies have one, and its current interest rate on policy loans is 6% a year, effective 1 June 2026.

In short

What a policy loan is, and why most cover has none

A policy loan is a loan from the insurer, secured on the cash value of a life policy and charged interest. Cash value, also called surrender value, is the savings part of a policy that builds up over the years on top of the cover itself. The Life Insurance Act 1908 already allows for this: it refers to a company that has "advanced money on the security of the policy" (s 47) and to applying "the surrender value" to overdue premiums (s 63). The Act does not say any particular product has a cash value today. That depends on the policy you hold (Life Insurance Act 1908, version as at 28 October 2021).

Protection-only cover works the other way. You pay for a year of cover, and the insurer pays if a claim event happens. Sorted says the most common type is term life, and that "some older life insurance policies had a savings component attached to them" which "may not have been the most cost-effective way to save", adding that today it is regarded as simpler to keep life insurance and savings separate (Sorted).

What the wordings say

Policy Cash value or loan feature Source
Momentum Quick Life "A protection policy only. It does not build up any cash or surrender value." Quick Life wording, Nov 2025, p13
Momentum Funeral Insurance "Not a savings or investment plan." Cancel after the 30-day free look and the premiums paid are not returned Funeral wording, 17 Aug 2023, pp2 and 7
AIA Living (umbrella wording) "The policy has no surrender value or cash value if it is cancelled" AIA Living umbrella wording, version 8
AIA Cover for Life AIA describes lifetime cover with level premiums for a fixed payment term. The pages we read describe no cash value or loan feature, so ask AIA for the wording AIA life insurance page
Resolution Life Whole of Life and Endowment (closed) "A savings component"; policy loans "attract an interest rate", currently 6% a year (effective 1 June 2026) Resolution Life NZ

Quick Life's first two years matter too: it does not pay for pre-existing conditions or suicide in that time. Funeral Insurance pays only for accidental death in its first 24 months, and its total premiums can end up larger than the benefit. Neither policy is a place to save.

Where loans still exist: old whole of life and endowment policies

Resolution Life says its Whole of Life and Endowment policies "provide long-term, increasing life cover with a savings component" and "accumulate value over time". It also says the Whole of Life, Endowment and Pure Endowment policies "are no longer sold to new customers", and that policy loans and premium arrears on them attract interest, with a current rate of 6% a year effective 1 June 2026 (Resolution Life NZ). It suggests speaking to your adviser first, and its page links to bonus rate documents for the older AMP Life and National Mutual Life Association ranges. From 2027, and subject to regulatory approval, Resolution Life and Asteron Life plan to become Acenda Life (Asteron).

Other insurers may hold similar older policies. Our guide to who holds an old insurance policy now maps the main legacy books. For what a policy is worth if you stop it, see surrender value of life insurance in NZ.

Questions to ask before you borrow

Ask the insurer to answer these in writing, using your policy number:

  1. What is the surrender value today, and does the policy allow a loan against it?
  2. How much can I borrow, and is the interest rate fixed or can it change? Resolution Life's rate is given with an effective date, so ask when yours was last set.
  3. What happens if I do not pay the interest?
  4. Does an unpaid loan reduce the amount paid on death, or the surrender value?
  5. Are there other options on the policy, such as reducing cover or stopping premiums?

A loan is debt. It is also a decision about a policy that may be hard to replace, because a new insurer will look at your full health history today (IFSO). Talk to a licensed adviser or the insurer before you act.

If your cover has no cash value and you need money

Cancelling will not release cash on these policies: both Momentum wordings and AIA's umbrella wording give a refund only inside a short free-look window, and nothing after it. Reapplying later can restart a waiting period, so cancelling to raise money can leave you worse off. A terminal illness benefit is an early claim, not a loan, and it ends the cover for that person. The dates, the refund rules and the terminal illness definitions are set out in can you cash out life insurance in NZ.

If the problem is the premium, look at changing cover rather than ending it. Cancel or change life insurance in NZ sets out the options.

Where Momentum fits

Momentum Life sells two products, Quick Life (ages 18 to 65) and Funeral Insurance (ages 40 to 75). Both are protection products, and neither wording describes a loan feature. Quick Life excludes pre-existing conditions and suicide for the first two years, and Funeral Insurance pays only for accidental death in its first 24 months. Momentum Life Limited has an A.M. Best financial strength rating of B (Fair), affirmed on 11 February 2026; see its financial strength page. The buttons on this page open Momentum's own application. Compare Quick Life and Funeral Cover with underwritten cover first, using how to compare insurance quotes.

Frequently asked questions

Can I borrow against Momentum Quick Life or Funeral Insurance?

No loan feature appears in either wording. Quick Life says it "does not build up any cash or surrender value", and Funeral Insurance says it is not a savings or investment plan.

Is whole of life insurance sold in New Zealand?

AIA describes Cover for Life as whole-of-life insurance with level premiums for a fixed payment term, and we found no AIA statement about a cash value or loans on it. Resolution Life's whole of life and endowment policies are closed to new customers.

What does a policy loan cost?

It depends on the insurer and the policy. Resolution Life's current rate on policy loans and premium arrears is 6% a year, effective 1 June 2026. Ask your own insurer for yours.

Does a policy loan affect my cover?

We found no source that says either way for New Zealand policies. Ask the insurer what an unpaid loan does to the surrender value and the death benefit.

Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). This page is general information, not advice. QuoteHub is a Momentum Life partner, and Smiths Insurance & KiwiSaver may receive a commission if you buy through our link; see our disclosure and how we are paid. Written by the QuoteHub Editorial Team from the sources below; last reviewed 20 October 2026.

References

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