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

Can you buy life insurance for a grandparent?

Sometimes, and mostly as funeral cover rather than life cover. Momentum Life's Funeral Insurance wording counts "the grandparent ... of the Policy Owner" as a Relative, so an owner can cover a grandparent aged 40 to 75 who is a New Zealander. Quick Life is different: its owner is usually the person insured, and its wording lists only parents or siblings as other owners, so a grandchild cannot own it.

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Funeral cover: Only accidental death is covered for the first 2 years. Total premiums can add up to more than the cover, and it may not meet the whole cost of a funeral.

Life cover: Conditions you already have aren't covered for the first 2 years (premiums refunded instead). Suicide isn't covered for the first 2 years, and a few conditions can be excluded permanently.

Insurer: Momentum Life Limited. Financial strength rating B (Fair) from AM Best, affirmed 11 February 2026; B ratings sit in AM Best's 'vulnerable' range. The rating scale is available for inspection at every Momentum Life office in New Zealand. What this means

Already have cover? Keep it. New cover won't pay for a condition you already have in its first 2 years.

Opens Momentum Life's online application; its guidance only covers eligibility. QuoteHub is a Momentum Life partner. Smiths Insurance & KiwiSaver may receive a commission if you buy. General information, not advice.

In short

A common assumption is that a grandchild "cannot" own a Momentum policy on a grandparent. For Funeral Insurance that is wrong: the wording defines Relative to include the owner's grandparent (or the grandparent of the owner's partner).
The grandparent must still meet the product's own rules: aged 40 to 75, living in New Zealand, and a citizen, permanent resident visa holder or on a work visa for at least 12 continuous months.
Quick Life cannot be owned by a grandchild on a grandparent, and it takes no one over 65.
Whoever owns the policy pays the premiums, can cancel it and is paid the benefit. Talk to the grandparent first.
The first 24 months pay only for accidental death. Total premiums can exceed the benefit, and the benefit may not cover the whole funeral.

What the law says about insuring someone else

The worry behind this question is "insurable interest", the old idea that you can only insure a life if you would lose by that person's death. For life insurance, New Zealand no longer requires it. Our guide on life insurance for grandchildren cites section 6 of the Insurance Law Reform Act 1985 for that point. The Contracts of Insurance Act 2024 goes further: a life policy is not void because the policyholder had no interest in the life insured (sections 75 and 76). That Act is not yet in force; the FMA gives 15 November 2027 as its start date (FMA: Contracts of Insurance Act 2024).

So the limit on a grandchild buying cover is not a legal test of "interest". It is what each insurer's policy wording allows. Insurers decide who can be an owner, who can be a life insured and what the life insured must agree to. This page is about Momentum Life's two guaranteed-acceptance products because those are the ones the wording lets us check.

Who can own what: the matrix

Who is the owner and who is insured	Momentum Funeral Insurance	Momentum Quick Life
You on yourself	Yes, ages 40 to 75	Yes, ages 18 to 65
An adult child on a parent	Yes: a parent is a Relative	Not listed in the wording
A grandchild on a grandparent	Yes: a grandparent is a Relative	Not listed; owners are limited to parents or siblings
A partner on a partner	Yes: a Partner is a Relative	Joint cover with a partner
A parent or sibling on an adult family member	Yes, if the person insured is a Relative of the owner	Yes, with each life insured's consent

The Funeral Insurance wording says "Who can apply: New Zealanders. Single: you or a Partner/Relative. Family: up to four Lives Insured", and each extra person must be a Partner/Relative. A Relative is a New Zealander who is the parent, grandparent, brother, sister, uncle, aunt, nephew, niece, or natural or legally adopted child of the owner or of the owner's partner (Momentum Life: Funeral Insurance Policy Wording). The Quick Life wording says policies may be owned by an immediate family member "limited to parents or siblings", and that where the owner is not the person insured, "the consent of each Life Insured is required" (Momentum Life: Quick Life Policy Wording).

The grandparent's own eligibility still applies

Owning the policy does not change the rules for the person insured. For Funeral Insurance that means:

Age 40 to 75. A grandparent over 75 cannot be added, whoever the owner is.
A New Zealander. The grandparent must live in New Zealand at application and be an NZ or Australian citizen, hold a permanent resident visa, or have been in New Zealand continuously for at least 12 months on a valid temporary work visa.
No health questions. Acceptance is guaranteed for people who meet those rules: no medicals, health questions or paperwork.
The owner must be a natural person who is also a New Zealander. A company or trust cannot be the owner.

Quick Life stops at 65, so it rarely helps with a grandparent in any case.

The Quick Life wording asks for the consent of each life insured when someone else owns the policy. The Funeral Insurance wording we read says nothing either way about the insured's consent, and we found no source describing how Momentum's application handles it. Do not assume the application will check. The sensible and respectful step is to talk to your grandparent first. If they do not know about the policy, they cannot tell you what they want, and the person who owns it would carry the premiums for years.

If you plan to apply, ask Momentum directly (0800 108 108) how an application for a person other than the owner works and what it asks of that person, before you pay anything. QuoteHub cannot confirm that for you, and the online application is Momentum's own.

What owning a policy on a grandparent means in practice

The Funeral Insurance wording sets these terms for the owner:

You pay, and you decide. The owner pays the premiums and can cancel with 30 days' notice. Cancelling after the first 30 days loses all premiums paid. If a premium stays unpaid for more than a month, Momentum can cancel the policy, and reinstating it is not guaranteed.
You are paid, not the funeral director. Benefits are paid to the owner, and Momentum cannot pay a company, charity or other organisation, so a funeral director cannot be named. Payment is usually within 24 to 48 hours of claim approval, not of the death.
The first 24 months pay only for accidental death, where death happens within 90 days of the accident. For any other death in that window, no benefit is paid and all premiums for that person are refunded. After 24 months, death from any cause is covered.
Premiums are level to the insured's 89th birthday, then stop, and the cover continues for life. Premiums can change for everyone on the same offer on 30 days' written notice, for a change in tax or other law or if claims experience is significantly different from expected.
You may pay more than you get back. The wording says total premiums could exceed the benefit and the benefit may not cover the cost of a funeral. It is not a savings plan.
There is a 30-day free look from the acceptance date, with a full refund if no claim has been made.

Benefits run from $3,000 to $30,000 (triple for accidental death), with a $30,000 cap per life insured across Momentum's funeral policies. Momentum publishes no funeral premium, so we show none; ask for the premium for your grandparent's age before you commit. Momentum's A.M. Best financial strength rating is B (Fair); see Momentum's financial strength page.

Other ways a family can pay for a grandparent's funeral

Insurance is only one route, and often not the first one to try.

Savings or a joint plan. A grandparent can set money aside themselves, or the family can agree to pay into an account everyone can see.
A prepaid funeral. Now For Them, set up through the funeral directors' association, describes itself as "not a savings or investment product" and pays no interest. Its page says the first $10,000 is excluded from residential care asset testing under current Ministry of Social Development policy, which matters if your grandparent may need rest-home care (FDANZ: Now For Them). Our comparison of funeral insurance and a prepaid funeral sets out the trade-offs.
The estate. The executor decides about the funeral, or the closest relative if there is no executor, taking family views and cultural practices into account (Community Law). Banks can release money from the person's account to pay for the funeral without waiting for probate (govt.nz).
The Funeral Grant. Work and Income's grant has a maximum of $2,697.43 (page updated 24 June 2026). Its list of people does not name grandparents; a grandparent can fit only as "a single person over 18 whose funeral you arrange", so ask Work and Income about your family's case. Prepaid funeral cover can stop you getting the grant, and the cash assets counted in its test include life insurance proceeds (Work and Income). See our guides to the Funeral Grant and who pays for a funeral.

For a parent rather than a grandparent, read funeral insurance for parents. To see how the products work, go to our funeral insurance hub, the guaranteed acceptance guide and Momentum's Funeral Insurance page.

When to talk to a licensed adviser

If your grandparent is over 75, has no cash and no plan, or you are weighing a policy against a prepaid funeral or the estate, a licensed adviser can look at the whole picture. 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 on Momentum products; see how we are paid. The buttons on this page lead to Momentum's own application.

Frequently asked questions

Can I take out life insurance on my grandmother or grandfather without them knowing?

The law does not stop a policyholder having no interest in the life insured (Contracts of Insurance Act 2024, ss 75 and 76, from 15 November 2027 and not yet in force; our children's-cover guide cites the 1985 Act for the current rule). Whether an insurer allows it is a different question. Quick Life's wording requires the insured's consent. The Funeral wording we read is silent, so ask Momentum. We would not do it in secret.

Can my grandparent be added to my Momentum funeral policy?

Under the wording, a grandparent of the owner is a Relative, so yes if they are a New Zealander aged 40 to 75. A family policy covers up to four people, each a Partner or Relative.

What if my grandparent is 80?

No Momentum product accepts new applicants over 75. Other insurers publish funeral cover to 79 or 80; see life insurance over 70 and the guaranteed acceptance hub.

Will the payout go to the funeral director?

No. Momentum pays the owner (or a nominated natural person) and cannot pay a company, charity or other organisation.

References

Momentum Life: Funeral Insurance Policy Wording (17 August 2023), retrieved 17 October 2026
Momentum Life: Quick Life Insurance Policy Wording (November 2025), retrieved 17 October 2026
Momentum Life: Financial strength, retrieved 20 October 2026
Financial Markets Authority: Contracts of Insurance Act 2024, retrieved 20 October 2026
Work and Income: Funeral Grant, retrieved 20 October 2026
FDANZ: Now For Them, retrieved 20 October 2026
Community Law: Funerals and tangihanga, retrieved 20 October 2026
govt.nz: What to do when someone dies, retrieved 20 October 2026