Continuation Options: Converting Group Life Insurance in NZ
A continuation option lets an employee leaving a job convert group life cover into a personal policy with the same insurer, at the insurer's current individual rate, without fresh medical questions on conditions the group scheme already accepted. It only exists where the employer's scheme includes it: AIA's option must reach AIA within 60 days of eligibility, and Asteron Life gives a departing member 60 free days of extended cover before the window closes. Cover carried across is capped at the group amount, group loadings still apply, and the insurer can still ask about new occupation and smoking status. A licensed adviser can confirm whether a scheme has the option before the deadline.
In short
- AIA's continuation option must be received within 60 days of eligibility, and now covers Life to age 75 and TPD, IP and Critical Illness to age 70 (AIA Continuation Options Adviser FAQ, July 2025).
- Asteron Life gives a former member 60 days of unpaid extended cover to exercise the option, with the new premium set on "our premium rates available at the time" (Asteron Life Employee Insurance policy document).
- Fidelity Life confirms employees "may be able to continue their cover directly with us when they move to a new employer" (Fidelity Life, Group Life insurance).
- Group life made up $204 million of New Zealand's $3.31 billion annual life insurance premium pool, roughly 6 percent, in the year to 31 March 2026 (Financial Services Council, Spotlight on Life Insurance, March 2026 quarter).
Group life is cover most New Zealanders never applied for, and it ends the day the job does. A continuation option lets a departing employee keep the underwriting position already held, on a deadline easy to miss if nobody says it exists.
What is a continuation option on a group life policy?
A continuation option is a clause in some employer group schemes letting a member who loses group cover apply for an individual policy with the same insurer without full medical underwriting. AIA describes it as letting a member "continue their cover on an individual policy on the same terms and without medical underwriting" (AIA Continuation Options Adviser FAQ, July 2025). It attaches to the specific scheme, not every policy: Asteron Life's wording applies only "if the Policy Schedule states that a Life Cover Continuation Benefit applies" (Asteron Life policy document). It differs from the "conversion option" on individual term policies, which just switches product type.
Which NZ insurers offer it, and how long do you have?
AIA, Asteron Life and Fidelity Life each publish continuation terms for group life cover. Chubb Life sells Group Life, TPD and Trauma to employers with "at least 10 employees" but does not publish terms online (Chubb Life, Group Insurance); we found none for Partners Life.
| Insurer | Group product | Continuation option | Deadline |
|---|---|---|---|
| AIA | Corporate Solutions | Yes | 60 days from eligibility |
| Asteron Life | Employee Insurance | Yes, if the schedule includes it | 60 days extended cover |
| Fidelity Life | Group Life / IP | Yes, "subject to the policy terms" | Not published |
| Chubb Life | Group Life, TPD, Trauma | Not published | Not published |
| Partners Life | Not confirmed | Not found | n/a |
AIA's application "must still be received by AIA within the 60 days," even where a related claim is pending (AIA Adviser FAQ); Asteron Life's 60 free days simply lapse if not used (Asteron Life policy document).
What does converting to a personal policy cost?
Nothing waives the price: a continuation option removes new health underwriting, not age, occupation or smoker status, and it is never charged at the group rate. Asteron Life sets the new premium on "our premium rates available at the time," based on "age, sum insured, gender, new occupation...and smoking status" at application, "increased by any loading factors" from the group plan (Asteron Life policy document). QuoteHub's Premium Index shows that age curve as indicative, standard rates for $500,000 of Life cover, male non-smoker, from insurers' published rate cards as at 8 September 2026.
| Age at continuation | Typical monthly cost |
|---|---|
| 30 | $30 to $40 |
| 45 | $50 to $70 |
| 60 | $300 to $350 |
Indicative monthly cost from insurers' published rate cards as at 8 September 2026 (see AIA and Fidelity Life for two insurers' own published rates). Subject to underwriting; a continued policy adds any group-scheme loadings.
What do you keep, and what do you lose, in the switch?
A member keeps the sum insured held under the scheme and any conditions already accepted, and loses the ability to increase cover without new underwriting. Asteron Life caps the continued amount at "no greater than the cover...provided...at the time the cover ceased," issuing "a product...that we consider provides the most similar benefits" (Asteron Life policy document).
"No medical questions" is narrower than it sounds. Asteron Life still underwrites the continuing member's "new occupation," "hazardous pursuits" and "residence and travel," and Fidelity Life's own form still asks whether the applicant has "smoked...in the last 12 months" (Fidelity Life continuation form). What is waived is underwriting on conditions already covered, not every question.
Why this matters more than the group scheme lets on
Group life is a small but real slice of the New Zealand market: Group Life, Death and Disablement premiums totalled $204 million of the industry's $3.31 billion in annual life insurance premiums, in the year to 31 March 2026 (Financial Services Council, Spotlight on Life Insurance, March 2026 quarter). Most members hold that cover because it needed no application, precisely the group most exposed if a health condition appears before a window closes. Our guide to group versus individual life insurance sets out the wider gaps.
What to do before your last day
Ask HR or the scheme administrator, in writing, whether the scheme has a continuation option, what the deadline is measured from, and which product it converts to, before resigning. Request an illustration early: AIA will not accept a late application, even while a related claim is being assessed (AIA Adviser FAQ). See our guides to the underwriting process and changing jobs.
Frequently Asked Questions
Does every group life scheme in NZ have a continuation option?
No. It has to be written into that scheme's own policy schedule (Asteron Life policy document). Ask HR or the scheme administrator to confirm.
Is a continuation option cheaper than a normal individual life policy?
No. It is priced like a new individual application on age, occupation and smoker status, plus any group-scheme loadings (Asteron Life policy document). It saves medical underwriting, not the premium.
What happens if I miss the deadline?
The member becomes a new individual applicant, with full medical underwriting and no guarantee of the group scheme's terms, the outcome a continuation option exists to avoid.
Does the option treat redundancy differently from resignation?
No, though Fidelity Life's form asks whether the applicant is "ceasing employment due to sickness or injury" (Fidelity Life continuation form). A separate redundancy benefit on an income protection policy is a different product; see our guide to redundancy cover in NZ.
Talk to a Licensed Adviser
A licensed adviser can request a scheme's policy document, confirm whether a continuation option exists and what its deadline is, and get an illustration ready before it closes, with no obligation to proceed. Start a cover check with QuoteHub's licensed advisers, or read more on our life insurance hub.
References
- AIA Corporate Solutions Continuation Options Enhancement, Adviser FAQ, July 2025
- Asteron Life Employee Insurance, Life, Trauma and TPD Covers Policy Document (08/19)
- Fidelity Life, Group Life insurance
- Fidelity Life, Group continuation option application form
- Chubb Life, Group Insurance
- Financial Services Council, Life insurance cover softens as premium pressure builds, 8 June 2026
- Financial Services Council, Spotlight on Life Insurance, March 2026 quarter
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