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

Guaranteed and non-guaranteed insurance benefits explained

The word "guaranteed" is used for three different promises in life insurance: a benefit amount, a premium rate and acceptance without health questions. A guaranteed benefit is the amount in your policy schedule, paid only if a claim meets the policy conditions. Premium rates and limits can often change under the wording. Guaranteed acceptance is a separate idea: it describes how you join, not what is paid.

In short

Three promises that get called "guaranteed"

People use the word for three different things. Reading a policy is easier when you ask which one is meant.

Promise What it means What can still change
Guaranteed benefit A sum insured written in the schedule that is payable when a valid claim is accepted Whether the claim meets the conditions, any early-years restriction, and any later increase or cap on the amount
Guaranteed premium A rate the insurer commits to hold for a stated period The rate at the end of the period, or earlier for tax or claims-experience reasons if the wording allows
Guaranteed acceptance You are accepted without health questions What is paid in the early years, and the always-excluded events

Guaranteed acceptance, the last one, says nothing about how much is paid or what you will pay.

The benefit: fixed amount, conditional payment

A life, funeral or accident benefit is a stated amount. For Momentum Life, Funeral Insurance pays a benefit you choose from $3,000 to $30,000, and accidental death pays three times it (so a $30,000 benefit pays $90,000) where death happens within 90 days of the accident (Momentum Life: Funeral Insurance Policy Wording). Quick Life pays an amount from $50,000 to $300,000 per life insured (Momentum Life: Quick Life Insurance Policy Wording).

The word "guaranteed" would overstate three conditions that apply to those amounts:

  1. An early window. On Funeral Insurance, the first 24 months pay only for accidental death. Any other death in that window pays no benefit and all premiums for that person are refunded. On Quick Life, the first 2 years exclude pre-existing conditions and suicide.
  2. Disclosure. Quick Life says that if anything you provide is incorrect, incomplete or misleading, Momentum can decline a claim, reduce the benefit or cancel the policy. The Insurance and Financial Services Ombudsman Scheme (IFSO) has published cases where an insurer applied 50% loadings after a claim and paid a reduced benefit (IFSO), and one settled at half the life benefit, $95,664, over history that was not disclosed (IFSO).
  3. The maximum can move. The Funeral wording says the maximum benefit "may change from time to time" and that Momentum "will not notify you" when it does. That affects what you can add later, not your existing benefit.

The premium: "level" and "guaranteed" are not the same

A level premium does not rise with age. It is still not a promise that the price will never change.

The practical question is what the wording lets the insurer change, and how many days' notice it must give. Our guide to stepped versus level premiums covers the structures.

Increases and what the policy is not

Quick Life's benefit rises 3% on each policy anniversary until age 75 or a $500,000 cap per life insured, whichever comes first, and the premium rises with it. You can skip an increase. This is a contractual feature, not an investment return.

Both Momentum wordings state that the policy is not a savings or investment plan, and total premiums could exceed the benefit. Quick Life "does not build up any cash or surrender value", and AIA's wording gives no surrender value either. We found no bonus, profit share or projected investment value in the Momentum wordings. If an older policy you hold mentions bonuses or a surrender value, the policy schedule and the insurer's own documents say which figures are promised and which are only illustrations. Anything shown as a projection is not a promise.

A worked example

These round numbers are for illustration, not a quote.

Policy What is fixed What is not
Quick Life, $200,000 at age 40 The $200,000 listed in the schedule once the claim is accepted; the 3% increase (to $206,000 after one anniversary) unless you opt out Premium: it is re-set each year; the first 2 years exclude pre-existing conditions and suicide; non-disclosure can reduce the benefit
Funeral Insurance, $10,000 at age 60 $10,000 from any cause after 24 months; $30,000 for an accident within 90 days In the first 24 months a non-accidental death pays nothing and premiums are refunded; the rate can change on 30 days' notice; the benefit may not cover the whole funeral

Do not mix it up with guaranteed acceptance

A page or advertisement that says "guaranteed" about a policy may mean only that you will not be asked health questions. Momentum's Funeral Insurance and Quick Life both work that way, which is why each restricts the first two years. That is a trade for easy entry, and the guaranteed acceptance versus full medical page sets out the differences. Quick Life takes ages 18 to 65 and Funeral Insurance 40 to 75; the policy details are on the Quick Life and Funeral Cover pages.

Questions to ask before you rely on a benefit

More are in our list of questions to ask about life insurance, and the page on life insurance exclusions explains what a benefit will not pay for.

A licensed adviser can read the wording of a specific policy with you. Advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a Momentum Life partner, and Smiths Insurance & KiwiSaver may receive a commission if you buy through our link; see how we are paid. Momentum Life Limited's A.M. Best financial strength rating is B (Fair): see its financial strength page.

Frequently asked questions

Is a guaranteed benefit the same as guaranteed acceptance?

No. A guaranteed benefit is an amount stated in the policy and paid when a claim meets the conditions. Guaranteed acceptance means you are accepted without health questions, and it usually comes with a restricted first two years.

Are life insurance payouts in New Zealand ever "non-guaranteed"?

For the Momentum products read here, the benefit is a set amount, and we found no bonus or profit share. What is not fixed is the premium, any later cap, and whether a particular claim meets the conditions. Older policies with an investment component may differ, so read the schedule.

Can my premium change on a level policy?

Yes, if the wording allows it. Momentum's Funeral Insurance rate can change for tax or claims-experience reasons on 30 days' notice, and other insurers recalculate at review points.

References

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