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

Choosing life insurance just to cover funeral costs

If funeral expenses are the only goal, you can choose between funeral insurance, a small life policy, a prepaid funeral plan, or setting money aside. FDANZ's 2026 report puts an average full funeral with cremation at $11,700 and with burial at $14,300. Momentum's Funeral Insurance accepts ages 40 to 75 for $3,000 to $30,000 with no health questions, but it pays only for accidental death in the first 24 months, and total premiums can end up larger than the benefit.

In short

What you are insuring

A funeral is a one-off cost with a rough size. The same FDANZ report lists the scenario behind those averages: a funeral home service for 50 guests, with a celebrant, a mid-price casket and a weekday transfer. A simple unattended cremation averages $4,700. The Work and Income Funeral Grant has a maximum of $2,697.43 (page updated 24 June 2026), is means-tested for a partner or child, and prepaid funeral cover can stop you getting it (Work and Income). See what a funeral costs before choosing an amount. The funeral cover amount calculator can help.

Four routes compared

Funeral insurance Small life cover Prepaid funeral plan Saving
Example Momentum Funeral Insurance, NZ Seniors, AA Life, Chubb Life Underwritten term or whole-of-life, through an adviser Now For Them (FDANZ) A separate account
Health questions None Yes None None
Ages Insurer sets them; Momentum 40 to 75 Insurer sets them Check the provider's terms Any
Early death Accident-only window (Momentum 24 months; NZ Seniors 12) Terms as offered Funds held in trust Whatever you have saved
Cost shape Level premiums to a stop age Stepped or level Check current terms; "no fees", no interest paid None
Main risk Premiums can exceed the benefit Term may end before you die Only the first $10,000 is excluded from residential care asset testing; a prepaid account counts as an asset for the Funeral Grant Spent on something else

Now For Them says it is "not a savings or investment product", pays no interest, and charges "no fees" (it will say if that changes) (FDANZ). See funeral insurance versus a prepaid funeral.

Momentum Funeral Insurance and Quick Life

Momentum's Funeral Insurance accepts New Zealanders aged 40 to 75 for $3,000 to $30,000. Acceptance is guaranteed: no medicals, health questions or paperwork. Premiums are fixed each year until the 89th birthday, then stop, and cover continues for life. They can change for everyone on the plan, for a change in law or claims experience, on 30 days' notice.

In the first 24 months, only accidental death within 90 days of the accident is paid. Accidental death within 90 days of the accident pays three times the benefit at any time, including inside that window. Any other death in that window pays nothing and all premiums for that person are refunded. There is no terminal illness benefit (Momentum Life: Funeral Insurance Policy Wording, 17 August 2023).

Quick Life suits a different job. It is guaranteed acceptance life cover for ages 18 to 65, $50,000 to $300,000, with premiums that rise each year until 75. In its first 2 years it excludes pre-existing conditions and suicide. For a funeral-only goal, $50,000 is more than the cost of most funerals, and the premiums are stepped, so the cost rises each year.

Momentum Life Limited has an A.M. Best rating of B (Fair), affirmed 11 February 2026; read its financial strength page. For a side-by-side of Momentum, NZ Seniors and OneChoice, AA Life and Chubb Life on entry age, early-death window and premium shape, see the funeral insurance comparison. Not every NZ insurer is included there.

When underwritten cover may cost less

The Premium Index starts at $250,000 of life cover, so it prices no small sums. Ranges for a $250,000 policy including Momentum's Quick Life are wide: at 40, the Premium Index range is $25 to $70 for a man and $20 to $60 for a woman, a typical monthly cost worked out on the method page (Premium Index). That does not tell you the price of $15,000 of underwritten cover. Ask an adviser whether an insurer accepts a small sum and what the minimum is; we found no published minimum. A healthy person can usually get more cover for less with fully underwritten cover through an adviser. A policy that expires does not pay a funeral, so check the expiry age, and see the level premium page.

AA Life publishes one price: from $14.28 a week for $10,000, for a 66-year-old female AA Member, non-smoker (AA Life, read 20 October 2026). That is a single stated profile, not a market price.

Stepped against level: a break-even example

The numbers are invented and round, to show how to test your own quotes. They are not from any insurer.

Suppose a stepped policy costs $360 in its first year and rises by $48 each year, while a level policy costs $600 a year. Cumulative cost:

Year Stepped, cost that year Stepped, total paid Level, total paid
5 $552 $2,280 $3,000
10 $792 $5,760 $6,000
11 $840 $6,600 $6,600
15 $1,032 $10,440 $9,000

The stepped plan is cheaper for 10 years and costs more from year 12. The break-even is where the running totals meet. Real policies rise at their own rate, so ask for the yearly cost at 5-year intervals from each insurer. Also notice the second point: at $600 a year a level policy has collected $10,000 after 16 years and 8 months. Funeral insurance can cost more in total than it pays. Greenwich's Funeral Plan is the only product we found that stops premiums once the total paid equals the benefit (Greenwich Life).

Which fits

The buttons on this page open Momentum's own application. Funeral Insurance is open at 40 to 75 and Quick Life at 18 to 65; neither accepts someone outside those ages. Your age decides which, if either, applies.

How we are 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. General information, not advice. Written by the QuoteHub Editorial Team and reviewed by the QuoteHub Adviser Team, 20 October 2026. For more on funeral cover, read the funeral insurance hub, how funeral insurance works and the Momentum Funeral Cover and Quick Life pages. An accidental death policy is a different product: see accidental death insurance.

Frequently asked questions

Is funeral insurance the same as life insurance?

No. Funeral insurance is a small fixed benefit with guaranteed acceptance and an early window. Life insurance is larger and usually underwritten.

Will it pay in the first year?

Momentum's Funeral Insurance pays in the first 24 months only for accidental death within 90 days. Any other death refunds the premiums.

Is saving cheaper than insurance?

It depends how long you live. Insurance pays the benefit even if you die early from an accident, while savings pay what you have saved.

References

Read the full insurance guides

Compare your cover with a licensed NZ adviser · free, no obligation.

Start your free comparison

Compare panel options first. A licensed NZ adviser can then review existing cover or help with an application.

Free, no obligation. Licensed NZ advisers · Craig Smith Business Services Ltd, FAP FSP712931.

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