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

Is $100,000 enough life insurance for your needs?

Whether $100,000 of life insurance is enough depends on what it has to pay for: debts, funeral costs, the income your household would lose and who depends on you. It can clear a car loan and a funeral with money to spare, but it rarely covers a mortgage or years of lost income. Momentum's Quick Life offers $50,000 to $300,000 per life, so $100,000 is available, though a healthy person can usually get more cover for less with underwritten cover through an adviser.

In short

What $100,000 can realistically pay for

A lump sum is a single payment on death, as opposed to a regular income. It has to cover several jobs at once. List them before you look at an amount.

The funeral. FDANZ's 2026 report, based on typical prices from member homes, gives an average of $11,700 (range $10,000 to $13,900) for a full funeral with cremation, 50 attendees at a funeral home, catering, a celebrant and a mid-price casket, and $14,300 (range $12,800 to $17,000) with burial. Unattended cremation with no service averages $4,700 (FDANZ: 2026 New Zealand Funeral Industry Trends Report). Our funeral cost guide breaks these down.

Debts in your name. Debts held only in your name are paid from your estate under the Administration Act 1969 (s 26; legislation.govt.nz). A joint bank account passes to the surviving owner and is not part of the estate (Community Law). Joint debts differ, so check with the lender; see debts when someone dies.

Estate costs. The probate fee is $275, plus a lawyer's fee, which varies (Ministry of Justice). A High Court order is usually needed if the estate includes land or a house. Many banks, other account providers and insurers may release funds without a court order if the amount held is under $40,000 each, but they may choose not to (Ministry of Justice guide). KiwiSaver savings on death go to the estate, or under the small-sum rule, not to a named beneficiary. Read probate in New Zealand.

Income and care. Work and Income says benefit payments to a person who has died can continue for up to 28 days in some cases, then end (Work and Income). If both parents have died, an Orphan's Benefit may be payable for a child (Work and Income). None of these replaces a working adult's income.

The worksheet: three imagined households

These are not averages. We have not found a source for an "average NZ mortgage" that we are willing to put on this page, so the figures below are round numbers for illustration. Replace them with your own loan statements.

Line Household A: couple, two children, one main earner Household B: two earners, smaller mortgage Household C: single renter
Mortgage $450,000 $200,000 none
Car loan and cards $12,000 $12,000 $15,000
Funeral (FDANZ burial scenario) $14,300 $14,300 $14,300
Income gap $180,000 (3 years of $60,000) $40,000 (1 year) none
Total needed $656,300 $266,300 $29,300
Less savings or other cover $60,000 $30,000 none
Gap after savings $596,300 $236,300 none; $70,700 left from $100,000

How to read it:

The three-year income gap in Household A is a choice. Some families need one year, others until the youngest child finishes school. Our guide to how much life insurance you need and the funeral cover amount calculator help with the other half of the sum.

When $100,000 is an appropriate amount

It is more likely to fall short if you have a mortgage, children under 18, a partner who would struggle on one income, or business debts.

How $100,000 fits Momentum's Quick Life

Quick Life is guaranteed-acceptance life cover for New Zealanders aged 18 to 65, with no health questions or medical exam, for $50,000 to $300,000 per life (Momentum Life: Quick Life Policy Wording, November 2025). $300,000 is the starting maximum, not a cap: the benefit rises by 3% each anniversary until 75, or until a total of $500,000 per life, and you can opt out of an increase in any year. If each year's 3% applies to the previous year's benefit, $100,000 would be roughly $134,000 after ten years; premiums rise with it. Quick Life cannot match a large mortgage on its own.

Know the limits before you choose it. During the first 2 years, a death or terminal illness linked to a pre-existing condition, and suicide or intentional self-harm, are not covered, and premiums are refunded only where a pre-existing-condition death in the first 24 months leaves no claim payable. Pre-existing conditions are covered after that, apart from specific conditions the policy schedule lists as permanently excluded. Premiums step up each year until 75, then are fixed. It always excludes deaths caused by alcohol or drug effects, war, terrorism, criminal activity or a listed dangerous job or pastime. See the Quick Life plan page.

What $100,000 costs

QuoteHub's Premium Index prices $250,000, $500,000 and $1,000,000, not $100,000, so we publish no range for it here. Cost does not fall in a straight line with the amount: the Index shows the price per $100,000 falling as the sum insured rises (see life insurance cost by cover amount), and we have separate pages for $50,000 and $150,000. Any figure is indicative, and your own premium depends on underwriting.

For a healthy person, it is worth asking an adviser to price a larger amount through underwriting as well, because a healthy person can usually get more cover for less that way. See life insurance for healthy applicants and the comparison of guaranteed acceptance with full medical underwriting.

Using a funeral policy instead

If the only goal is a funeral and a small buffer, a funeral policy is a different product. Momentum's Funeral Insurance (ages 40 to 75) pays a benefit of $3,000 to $30,000 towards costs, and in the first 24 months pays only for accidental death. Total premiums can exceed the benefit, and the benefit may not cover the whole cost of a funeral. Saving the money instead is the other way to prepare. See the funeral insurance hub.

Advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). This is general information, not personal advice, and a licensed adviser can size the amount your household needs. QuoteHub is a Momentum Life partner. 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), in the range Momentum's own table calls "Vulnerable" (Momentum: Financial strength).

Frequently asked questions

Is $100,000 life insurance enough to pay off a mortgage?

Usually not. It would clear a modest mortgage or part of a larger one. Add up your own loan balance and compare.

Is $100,000 enough for a funeral?

Yes in most cases. FDANZ's 2026 average is $11,700 for a cremation funeral and $14,300 for a burial funeral for 50 guests. The rest would be left for other costs.

Does the Funeral Grant mean I need less cover?

It can help, but it is small and tested: the maximum is $2,697.43 (Work and Income page updated 24 June 2026), and prepaid funeral cover can stop you getting it.

Can I start with $100,000 and add more later?

Quick Life increases 3% a year automatically. Larger increases need a request, are treated as new cover with their own 2-year restriction on the increase and are subject to Momentum's terms. Other insurers set their own rules.

References

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