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

Comparing health and life insurance in NZ

Health insurance in New Zealand pays towards the cost of private treatment while you are alive, such as surgery, specialist visits and diagnostic tests. Life insurance pays a sum when you die, and in most products when you are diagnosed as terminally ill. They are separate products that pay on different events. Some insurers offer a discount if you hold both, but we found bundling is a convenience, not a substitute for either cover.

In short

What each policy pays on

Event Health insurance Life insurance Trauma cover
Elective surgery or a hospital stay Pays towards the cost, under the plan No payment No payment
Specialist visit or diagnostic test Depends on the plan; nib describes outpatient cover for "seeing a specialist or surgeon, and diagnostic investigations" No payment No payment
Cancer diagnosis Pays towards treatment under the plan, subject to exclusions Pays only if death follows, or if the product has a terminal illness benefit and the person is expected to die within 12 months Pays a lump sum if the cancer is a listed condition that meets the definition
Terminal illness diagnosis Treatment costs under the plan Pays on terminal illness in the products we read (Fidelity, Chubb, Momentum Quick Life; Momentum Funeral Insurance has none) Depends on the definition
Death No payment Pays the sum insured Not its trigger: it pays on a defined diagnosis

Sources: nib: health insurance; Fidelity Life's underwriting guide defines life cover as a lump sum on death or on terminal illness with less than 12 months to live, and trauma cover as a lump sum "if the life insured suffers from a defined serious illness or condition". The Insurance & Financial Services Ombudsman says trauma cover "will only cover certain specified life-threatening health conditions" (IFSO). Do not treat health and trauma cover as the same thing: health pays for treatment, trauma pays a lump sum on a defined diagnosis. For that line see life versus trauma insurance.

Should you bundle them?

The Financial Markets Authority lists "bundling policies if you're with multiple insurers" as one way to reduce premiums, and its (fictional, but based on real examples) case study has a couple finding out years later that a promised multi-policy discount had never been applied. Its advice is to ask whether every applicable discount is included (FMA: insurance, updated 28 September 2026).

What we found on the ground:

Insurer Bundle or discount found
Southern Cross 10 percent off a Southern Cross Life & Living policy for Southern Cross Health Society members who tell the Life team; the discount does not apply to the policy fee and applies only while you remain a member. The life insurance is underwritten by Chubb Life. Members who applied before 20 November 2025 have different terms (Southern Cross Life, Health Society offers)
nib Life and living insurance is listed as its own product. Its "combined plans" bundle Hospital and Everyday health cover only; we found no health and life discount (nib)

Compared: Southern Cross and nib, on published bundle terms, as at 20 October 2026. Not every insurer is included. The trade-offs are practical rather than proven. A bundle with one company can mean one point of contact and a possible discount. Holding the two with different insurers lets you choose each separately, and the FMA's advice on switching applies: keep the old policy until the new one is in force, and watch for new exclusions and waiting periods. We did not find evidence that separate policies have better wordings than bundled ones, so we do not claim it. Our Southern Cross health versus life comparison goes into one insurer's pairing.

Pre-existing conditions: different tests in each

For health insurance, nib defines a pre-existing condition as "any sign, symptom, treatment, or surgery of any condition that happened on or before the insured person's join date". For the first three years nib does not pay claims linked to one; after three years of continuous cover it says it will cover eligible ones, but some are never covered under its Premium and Standard Hospital policies, including cardiovascular, cancer (nib does cover some pre-malignant cancers after appropriate treatment), hip or knee, back, transplant and reconstructive surgery (nib, 6 July 2026). Each health insurer's rules differ; see health insurance and pre-existing conditions.

For life insurance, an underwritten insurer asks about your health, and Asteron says it can add a stand-down period, raise the premium, or exclude the condition permanently or for a set time (Asteron). Momentum's Quick Life asks no health questions but excludes pre-existing conditions and suicide for the first 2 years; premiums are refunded if death from a pre-existing condition happens in the first 24 months and no claim is payable. See Quick Life. Momentum's Funeral Insurance pays only for accidental death in its first 24 months and refunds premiums for any other death in that window; total premiums can exceed the benefit. See funeral insurance.

Which one first?

There is no universal order. Questions to ask:

  1. Would someone be worse off financially if you died? That is the life cover question, and it grows with dependants and debts.
  2. Could you pay for private treatment from savings, or would you rely on the public system? See health insurance versus self-funding.
  3. Could you cope with a long illness, not just death? That points to trauma or income cover, not health cover.
  4. Which of the two is hard to get later? Both get harder to buy after a diagnosis, because underwriting asks about it.

Premiums for both usually rise: the FMA says most premiums go up annually with age or inflation. See what a life policy costs and is life insurance worth it.

Employer group schemes

If your employer provides group cover, check which of the two it includes and whether it ends if you leave. Our group versus individual life insurance guide sets out the differences, and the health insurance hub has the health side.

Who we are, and how we are paid

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 how we are paid. Momentum Life Limited has a financial strength rating of B (Fair) from A.M. Best, affirmed 11 February 2026; Momentum's own table groups B in its "Vulnerable" range, and A.M. Best says the rating is not a recommendation (Momentum: financial strength). The buttons on this page lead to Momentum's life products only. Last reviewed 20 October 2026 by the QuoteHub Adviser Team.

Frequently asked questions

Is health insurance the same as life insurance?

No. Health insurance pays towards treatment while you are alive; life insurance pays a sum on death or terminal illness.

Can I get one policy that covers both?

We found bundled discounts, such as Southern Cross Life's 10 percent for Health Society members, but each cover is still a separate product with its own terms.

Does health insurance cover pre-existing conditions?

Often not at first. nib, for example, does not pay claims linked to one for the first three years, and some are never covered. Check each plan.

References

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Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, Claims Support.