Life Insurance for Retirees and Pensioners in NZ
NZ Superannuation starts at 65, and for many households large debts and dependent children are behind them. The question is then often a modest funeral sum ($3,000 to $30,000 at Momentum Life) rather than large life cover. On a fixed income the points that matter are whether the premium stops rising, what happens if you stop paying, and what the policy pays in the first two years.
In short
- NZ Superannuation is paid fortnightly from age 65. From 1 April 2026 a single person living alone gets $1,110.30 a fortnight after tax at the M tax code.
- Momentum Life's Funeral Insurance accepts New Zealanders aged 40 to 75. Its premiums are fixed each year to the 89th birthday, then stop, but can change for everyone on the offer with 30 days' notice. Quick Life stops at 65.
- In its first 24 months Funeral Insurance pays only for accidental death; otherwise all premiums are refunded. Total premiums can exceed the benefit.
- Funeral cover is one of several ways to meet the cost of a funeral. Saving, a prepaid trust and the Funeral Grant are others, and some of them affect each other.
This page is about the money side for a retired household. Whether you need cover at all is a separate question, covered in do you need life insurance when you retire. Life insurance for retirees falls into two groups. Large-sum life cover, which protects a partner who relies on your income or debts that would fall on someone else, is usually bought earlier, and entry ages close in the 60s and 70s. Funeral cover is a small sum, bought to put a fixed amount towards a funeral, and it stays open longer. This page is general information about policy structures. It is not budgeting advice, and QuoteHub is not a welfare service.
What NZ Superannuation looks like each month
Work and Income lists NZ Super rates from 1 April 2026 per fortnight. After tax at the M code they are:
| Situation | Per fortnight, after tax (M) | About per month |
|---|---|---|
| Single, living alone | $1,110.30 | $2,406 |
| Single, sharing | $1,024.90 | $2,221 |
| Couple, both qualify (combined) | $1,708.16 | $3,701 |
The monthly figures are the fortnightly amount times 26 divided by 12 (QuoteHub's arithmetic). Other income, tax codes and housing costs change what you actually receive, so treat these as the reference rates only (Work and Income, retrieved 20 October 2026).
A premium against a pension: a worked illustration
Momentum publishes no funeral premium, and QuoteHub does not publish one for it. The table below therefore uses round hypothetical monthly amounts to show the share of NZ Super a premium takes. They are not prices.
| Hypothetical monthly cost | Single, living alone | Single, sharing | Couple, both qualify (one policy) |
|---|---|---|---|
| $20 | 0.8% | 0.9% | 0.5% |
| $40 | 1.7% | 1.8% | 1.1% |
| $60 | 2.5% | 2.7% | 1.6% |
| $80 | 3.3% | 3.6% | 2.2% |
Two lessons. The share is small for a single premium and grows with each policy and each person. And what matters over time is whether the figure stays the same. On a level premium the dollar amount does not step up with age; on a stepped premium it does, and a pension rarely rises at the same pace. IFSO published a case where a policy sold as "Level to age 80" converted to an age-based rate at 80 and the monthly premium went from $49 to $190; the complaint was not upheld (IFSO).
Funeral cover or life cover?
| Funeral cover | Larger life cover | |
|---|---|---|
| Typical sum | $3,000 to $30,000 at Momentum, NZ Seniors and OneChoice | Often $50,000 and up |
| Entry age examples | Momentum 40 to 75; AA Life 50 to 79; NZ Seniors and OneChoice 18 to 79; Chubb Life 50 to 80 | Momentum Quick Life 18 to 65; Fidelity Life 16 to 75; NZ Seniors Life 45 to 79 |
| Health questions | None | Quick Life none; others ask |
| Early window | Accident-only for 12 or 24 months, depending on the insurer | Quick Life excludes pre-existing conditions for its first 2 years |
| Purpose | A fixed amount towards funeral costs | Replace income or clear debts |
For many pensioners the funeral question is the live one, which is why the buttons on this page lead with the Funeral product. If you are 65 or under and want a larger sum, Quick Life takes ages 18 to 65, pays $50,000 to $300,000 and excludes pre-existing conditions and suicide for the first 2 years; its premiums rise each year to 75 and are then fixed. Over 75, Momentum takes no new applicants. See life insurance over 75 for what is published beyond that.
How Momentum's Funeral Insurance behaves on a retirement budget
Momentum Life's Funeral Insurance in plain terms:
- Benefit and accident cover. $3,000 to $30,000 from any cause after 24 months; accidental death pays three times the benefit where death occurs within 90 days of the accident.
- First 24 months. Only accidental death is paid. Any other death pays nothing and all premiums for that person are refunded.
- Premiums. The rate stays the same each year until the 89th birthday, then premiums end and cover continues for life. Momentum can change the rate for everyone on the same offer only for a change in tax or other legislation, or claims experience significantly different from expected, on 30 days' written notice. Premiums can be paid fortnightly, monthly or annually, and card payments carry a processing fee.
- If you stop paying. Momentum can cancel if a premium is unpaid for more than a month, and reinstatement is by application and not guaranteed. If you cancel, you lose the premiums already paid and need to reapply to come back in.
- Free look. 30 days from the acceptance date, with a full refund if no claim.
- Beneficiary. A natural person, not a company or funeral director.
Total premiums can end up larger than the benefit, and the benefit may not cover the whole cost of a funeral. Momentum Life's A.M. Best rating is B (Fair), which Momentum's own table puts in its "Vulnerable" range; its solvency ratio was 107% at 30 June 2026. See its financial strength page. Because NZ Super is also paid fortnightly, a fortnightly premium can be matched to the payment day. The risk to watch is a missed payment during a month with unusual costs, since the lapse rule above is strict.
Government help and how it interacts
Work and Income's Funeral Grant pays up to $2,697.43 (as at 1 April 2026; page updated 24 June 2026). It is non-taxable. Who qualifies depends on your relationship to the person who died, and income tests apply to partners and children. Work and Income says "prepaid funeral cover" can stop you getting the grant, and life insurance proceeds and prepaid funeral accounts count as assets (Work and Income). FDANZ's 2026 report puts the average full funeral for 50 guests at $11,700 with cremation and $14,300 with burial, and an unattended cremation at $4,700. See funeral grant NZ and funeral costs.
Other ways to meet the cost
- Savings set aside. Money in an account you do not touch. Check access and interest terms with your bank.
- A prepaid trust. FDANZ's Now For Them says it is "not a savings or investment product", pays no interest, and the first $10,000 is excluded from residential-care asset testing under current Ministry of Social Development policy (FDANZ). The older Funeral Trust FAQ says funds "may earn interest", so check current terms. Compare it with insurance in funeral insurance versus a prepaid funeral.
- Doing nothing. Some households have enough in savings or a bank account: a bank can release money from the deceased's account to pay for a funeral without waiting for probate (govt.nz).
Questions to ask a licensed adviser before committing pension money
- What is paid if I die in the first 24 months, and what is refunded?
- Can the premium change, and with how much notice?
- What happens if I miss a payment, and can I get back in?
- Does this policy affect any Work and Income support I might need?
- What is the total I would pay if I live to 89, against the benefit?
- How are you paid?
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. More on avoidable errors is in seniors life insurance mistakes, and the product itself is covered on the funeral insurance hub.
Frequently asked questions
Is life insurance worth it on NZ Super?
It depends on who relies on you, what you owe and whether savings cover a funeral. For many, the question is a modest funeral benefit against self-funding. Use the questions above.
Can I get life insurance at 70?
Momentum's Funeral Insurance accepts New Zealanders aged 40 to 75 with no health questions. Quick Life does not, as it stops at 65. Other insurers publish different limits; see life insurance over 70.
References
- Work and Income: Benefit rates, April 2026, retrieved 20 October 2026
- Work and Income: NZ Super, retrieved 20 October 2026
- Work and Income: Funeral Grant, retrieved 20 October 2026
- Momentum Life: Funeral Insurance Policy Wording (17 August 2023), retrieved 20 October 2026
- Momentum Life: Quick Life Insurance Policy Wording (November 2025), retrieved 20 October 2026
- Momentum Life: Financial strength, retrieved 20 October 2026
- IFSO: Increasing premiums case, retrieved 20 October 2026
- FDANZ: 2026 New Zealand Funeral Industry Trends Report (PDF), retrieved 20 October 2026
- FDANZ: Now For Them, retrieved 20 October 2026
- govt.nz: What to do when someone dies, retrieved 20 October 2026
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