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

Can you cash out life insurance in NZ?

Usually not. Life and funeral cover sold in New Zealand today is protection, so cancelling it ends the cover and, after a short free-look period, returns no premiums. Money can come back in three narrower cases: a policy cancelled inside its free-look period, an old whole of life or endowment policy with a surrender or maturity value, and a terminal illness claim, which pays a benefit and ends the cover.

In short

Cancel, surrender, mature, claim: what each one pays

These four words get mixed up. A surrender is handing an old policy back to the insurer for its surrender value, a cash figure only some savings-style policies carry. A maturity is the date an endowment policy pays its savings value. A claim is a payment because something insured has happened. Cancelling alone pays nothing unless a refund right applies.

What you do What comes back Where it applies
Cancel inside the free look Premiums paid, if no claim has been made Quick Life: 30 days from policy start. Funeral Insurance: 30 days from the acceptance date. AIA: return the policy within 15 days of receiving it
Cancel after the free look No premiums returned. Cover ends Quick Life, Funeral Insurance, AIA
Surrender an old savings-style policy The surrender value, if the policy has one Closed whole of life and endowment policies
Reach a maturity date A maturity value, if the policy has one Closed endowment policies
Claim for terminal illness The benefit; cover for that person then ends Quick Life and some underwritten policies; not Funeral Insurance

The free look: the one time cancelling gets premiums back

Momentum's Quick Life gives 30 days from the policy start date to cancel for a full refund if no claim has been made. After that you can cancel at any time, but premiums already paid are not refunded. Its Funeral Insurance wording has a 30-day free look from the acceptance date, then cancellation on 30 days' notice with premiums paid kept by Momentum. AIA's Living wording allows a refund if you return the policy within 15 days of receiving the document and nothing has been claimed, and states the policy "has no surrender value or cash value if it is cancelled" (AIA wording, version 8). Other insurers' free-look periods were not readable in public documents, so check your own policy schedule. See cooling-off and free-look periods.

Refunds that are not a cash-out

Two Momentum features return premiums, and neither is money back for outliving a policy.

Neither applies to someone who is alive. The Funeral wording also says total premiums could exceed the benefit and that the benefit may not cover the whole cost of a funeral, so it is not a savings plan. Some other products stop premiums once the total paid equals the benefit; Greenwich Life's Funeral Plan says so on its page. That is a feature of that product, not a refund.

Terminal illness: an early claim, not a surrender

Quick Life pays its benefit on a terminal illness, defined as an illness that, even with treatment, is expected to lead to death within 12 months, confirmed by a medical practitioner Momentum approves. Momentum can ask for an independent specialist opinion at its cost and that opinion is final. Once the benefit is paid, cover for that person ends. In the first two years it is not paid if the cause is related to a pre-existing condition or to suicide or self-harm.

Other insurers describe similar benefits. Fidelity Life's cover pays "if the life insured dies or is diagnosed with a terminal illness (and given less than 12 months to live)". AIA Essentials offers early payment of up to 100% of life cover if its terms are met. NZ Seniors' funeral cover pays 100% for 12 months or less to live. Momentum's Funeral Insurance has no terminal illness benefit. The details differ, so read the wording (Fidelity, AIA, NZ Seniors). For more, see terminal illness benefits in NZ.

Old policies with a surrender or maturity value

Sorted says "some older life insurance policies had a savings component attached to them that were paid out at a certain date" (Sorted). Resolution Life holds a closed book of whole of life, endowment and pure endowment policies and says it no longer sells them. Its page points to product option guides that explain "any impact on your insurance cover and/or savings" and says an adviser can usually provide illustrations of an estimated maturity value (Resolution Life NZ). The Life Insurance Act 1908, as at 28 October 2021, says a policy does not become void for unpaid premiums while the arrears are not more than the surrender value declared by the company (s 64) (legislation.govt.nz).

If you think you hold an old policy, find out who holds it now. Money an insurer cannot return can be passed to Inland Revenue as unclaimed money, generally after about five years (IR), and claims "take at least 12 weeks" (IR). For whether a given policy type has a value, see surrender value of life insurance in NZ; for loans, see borrowing against life insurance.

Before you stop paying anything

  1. Do not cancel the old policy until the new one is in force. The FMA says to keep the old policy running until the new one starts, and to watch for new waiting periods, pre-existing exclusions and different premiums (FMA).
  2. Expect a new insurer to look at your whole history. IFSO says a new insurer takes your full medical history into account, so exclusions or higher premiums can follow (IFSO).
  3. Remember reapplying restarts the clock. Quick Life says that if you cancel and come back, "your two year standdown period will recommence".
  4. Look at smaller changes first. A lower sum insured or different structure may cut the premium without ending cover; see when to cancel life insurance.
  5. Talk to a licensed adviser about an old policy before cancelling it.

Where Momentum fits

Momentum Life's Quick Life covers ages 18 to 65 for $50,000 to $300,000, with a first two years that exclude pre-existing conditions and suicide. Funeral Insurance covers ages 40 to 75 for $3,000 to $30,000, paying only for accidental death in its first 24 months. Neither pays anything to someone who cancels after the free look. Momentum Life Limited has an A.M. Best financial strength rating of B (Fair); see its financial strength page. Read the Quick Life and Funeral Cover pages, and compare them with underwritten cover before you use the buttons on this page, which open Momentum's own application.

Frequently asked questions

Can I get my premiums back if I never claim?

Not on the Momentum, AIA or similar protection policies described here, except inside the free look. A term policy that ends while you are alive pays nothing.

What happens if I stop paying?

Quick Life and Funeral Insurance let Momentum cancel if premiums are unpaid for over a month, and reinstatement is by application, not automatic. AIA allows 30 days' grace and can cancel if a premium is not paid within 31 days of the due date.

Is a terminal illness payout the same as surrendering?

No. It is a claim, it needs a medical practitioner's confirmation, and on Quick Life it ends cover for that person.

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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