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

Can grandparents arrange life insurance for grandchildren?

Not on their own in most cases. Under the Life Insurance Act 1908, only a child's parents or guardians, or a parent jointly with their spouse, can take out a policy on a child under 16, unless the District Court consents. A grandparent who is not a guardian needs that consent. Momentum has nothing for minors: Quick Life starts at 18 and Funeral Insurance at 40.

In short

What does New Zealand law say about insuring a child?

The Life Insurance Act 1908 is still in force, in a version current at 28 October 2021 on legislation.govt.nz. The rules for children sit in sections 66A to 67E. Insurable interest is not the test here, because New Zealand law no longer requires one for a life policy (Insurance Law Reform Act 1985, s 6). The test is who is allowed to take the policy out and who can be paid.

Rule What the Act says Section
Who may take out a policy on a child under 16 Parents or guardians (or one of them); a parent or guardian jointly with their spouse; or any person with the District Court's consent. No one else may, apart from the exceptions the Act lists 67
Payout cap if the child dies under 10 No more than premiums paid plus interest, and an amount that, with other insurers' payments, equals $2,000 or a larger sum set by Order in Council 67B
Who may be paid if the child dies under 16 The people who could take out the policy, their executors or administrators, a person who may be paid without administration under s 65(2) of the Administration Act 1969, or someone entitled by a court-approved assignment 67C
What the insurer must tell you A written statement of these limits in the proposal and a separate signed acknowledgment 67D
Savings-type policies Endowment policies on a minor's life, paying at the end of a set period or at a stated age, are lawful at any age 67A

A minor under 10 may take out a policy on their own life only through a contract the District Court has approved under the Contract and Commercial Law Act 2017 (s 66A). Two corrections to what is often written: the payout cap is in section 67B, not section 67, and the law does not say "parental consent". It says who may take the policy out, and a person outside that list needs a court's consent.

The Contracts of Insurance Act 2024 re-enacts these rules in sections 141 to 150 and replaces the 1908 Act. The main change is that the payout cap for a child under 10 becomes $15,000. That Act comes into force on a date set by Order in Council or, failing that, on 15 November 2027, the date the FMA gives (FMA). We found no Order in Council on 20 October 2026, so for now the 1908 figures apply.

What does this mean for a grandparent?

A grandparent is not on the list in section 67 unless they are also the child's guardian. So a grandparent who wants a policy on a grandchild under 16 either asks the parents to take it out, or applies to the District Court for consent. The insurer must also give the written statement and get the signed acknowledgment described above before it issues the policy. Whether a particular insurer will issue a children's life policy at all is a separate question: our page on life insurance for children explains that standalone cover is rarely sold and what exists instead, such as a child's trauma benefit included in a parent's policy.

Money matters follow the same logic. On a child's death under 16 the insurer may pay only those the Act names, so the person who paid the premiums may not be the person who is paid. Talk to a lawyer before putting any money into a policy on someone else's child. Tax questions go to an accountant. QuoteHub cannot give legal or tax advice.

What Momentum's products allow

Momentum's products are for adults, and the wordings are specific.

So the answer for a minor grandchild is no. For an adult grandchild between 18 and 65, the grandchild applies for Quick Life as the life insured, and a grandparent's help would be a gift or arrangement between you, not a policy ownership right. For funeral cover for yourself or a partner, see our funeral insurance hub.

Ways to help that are not a policy on the child

The sources we read do not describe any insurance route for a grandparent to cover a minor directly, so the realistic choices are:

  1. Talk to the parents, who may take out cover or already hold a policy with a child's benefit.
  2. Wait until the grandchild is an adult and can apply for their own cover.
  3. Put money aside, in your name or by gift, for later. A savings account is a legitimate way to prepare. If you are thinking of a trust or a gift, a lawyer should set it up.
  4. Look at your own planning. A will and an enduring power of attorney matter more to many grandparents than a policy on a child; see making a will.
  5. For large or complex estates, read life insurance for high net worth individuals.

Doing nothing is also a choice. There is no rule that a grandchild needs a life policy.

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 legal or personal 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 an A.M. Best rating of B (Fair), in A.M. Best's "Vulnerable" range (Momentum's financial strength page). Last reviewed 20 October 2026. You can check which Momentum plan an adult fits with the guaranteed acceptance eligibility checker, and the plan pages are Quick Life and Funeral Cover.

Frequently asked questions

Can a grandparent be the beneficiary of a child's policy?

For a child under 16 the insurer may pay only the people the Act lists: those who could take out the policy, their executors or administrators, and a few others. A grandparent who has the District Court's consent to take the policy out is in that group. Otherwise, no.

Can my grandchild be added to my Momentum policy?

No. Funeral Insurance accepts lives insured aged 40 to 75 and treats a grandparent, not a grandchild, as the owner's Relative. Quick Life covers people aged 18 to 65, and its cover is for you or you and your partner, so a grandchild under 18 is not eligible.

Is a child's life insurance payout really capped?

Under 10, yes. Section 67B limits the payout to premiums paid with interest plus $2,000, or any larger sum set by Order in Council. Between 10 and 16 the limit on who may be paid still applies.

Is there a free cover for a child through the parents?

Some parents' policies include a child's trauma benefit. See our children's page for how that works.

References

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Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, Compare Insurance NZ.