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

How much does life insurance pay out in NZ?

A New Zealand life insurance policy pays the benefit amount listed on your policy schedule, not an average. For Momentum Life, Quick Life cover runs from $50,000 to $300,000 per life insured and Funeral Insurance from $3,000 to $30,000. Indexation, caps, an accident multiple, early payments and exclusions then adjust what a claim actually pays.

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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.

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.

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

The amount is the sum insured you chose, shown on the schedule. We found no sourced national average, and one would not tell you what your policy pays.
Momentum's Quick Life rises 3% each policy anniversary until age 75 or a $500,000 cap per life insured, whichever comes first. Funeral Insurance pays 3 times the benefit for accidental death within 90 days of the accident.
A claim can pay less than the sum insured, or nothing, when an early-claim window, an exclusion, a limit or a disclosure problem applies.
Insurance payouts are generally excluded income for tax, according to Inland Revenue. That is general information, not tax advice.

What decides the final payout?

The policy is a contract. Momentum's Quick Life wording says that if a claim meets the policy conditions it pays "the benefit amount listed in your policy schedule" (Momentum Life: Quick Life Insurance Policy Wording, November 2025). Several rules then move the figure up or down.

Rule	How it changes the amount	Momentum example
Sum insured	The starting figure	Quick Life $50,000 to $300,000; Funeral Insurance $3,000 to $30,000
Indexation	Raises the sum on each anniversary	Quick Life: 3% a year until 75 or $500,000 per life; you can skip a year
Combined limit	Caps all cover with the insurer for one person	Quick Life $500,000 total; Funeral $30,000 across all funeral policies
Accident multiple	Pays more for a death by accident	Funeral: 3 times the benefit, if death is within 90 days of the accident
Early payments	Bring part of the sum forward, then subtract it	Terminal illness (Quick Life, 12 months); advance funeral payments elsewhere
Exclusions and windows	Remove the benefit for certain causes or periods	See the section on reductions below

A worked example, with round numbers

These figures are our arithmetic from the wording, not a quote. A person takes Quick Life at the starting maximum of $300,000 and never opts out of the 3% increase. The sum grows to about $309,000 after the first anniversary, about $347,800 after five and about $403,200 after ten. If the person took the policy out at 57 or younger, it reaches the $500,000 cap at the 18th anniversary and increases stop there; increases also stop when the person turns 75. Momentum's rounding may differ by a few dollars. The premium rises with each increase, and the wording also fixes the cap per life insured, so a second policy with Momentum does not add to it.

For Funeral Insurance, take a $10,000 benefit. Death from any cause after the first 24 months pays $10,000. Accidental death, with death inside 90 days of the accident, pays 3 times the benefit, $30,000, and that triple applies at any time, not only in the first 24 months. A death from illness in the first 24 months pays no benefit, and all premiums paid for that person are refunded (Momentum Life: Funeral Insurance Policy Wording). Total premiums can exceed the benefit and the benefit may not cover a whole funeral.

The lowest and the average payout

The lowest cover on Momentum's two plans is $50,000 for Quick Life and $3,000 for Funeral Insurance. Other published minimums differ: AIA's online Essentials range starts at $50,000 (AIA). The risk of picking the lowest is that it may not clear a mortgage or replace income; see how much life insurance you need.

We found no published national average payout for New Zealand that we can source, and we do not state one. An average would mix a $5,000 funeral policy with a multi-million-dollar business policy, and your claim is paid on your schedule.

Early payments change the numbers

Some benefits are paid before the full claim and then subtracted from the sum. Quick Life pays a terminal illness benefit if death is expected within 12 months, confirmed by an approved practitioner, with a second opinion treated as final; paying it ends that person's cover. Chubb Life's brochure lists an advance terminal illness payment of 30% of the Life Cover sum insured, up to $300,000, for listed conditions, and a Bereavement Support Benefit of up to $25,000 for funeral expenses, each subtracted from the final sum (Chubb Life brochure CIG0009 V6). Kiwibank's life cover, provided by nib, includes a $15,000 funeral expenses lump sum (Kiwibank). Read your own wording for the equivalent. See terminal illness benefits.

Why a claim can pay less, or nothing

Life insurance does not cover every death. Momentum's wordings show the main ways:

The early window. Funeral Insurance pays only for accidental death in the first 24 months. Quick Life excludes pre-existing conditions and suicide in the first 2 years, and a few conditions can be excluded for good in the schedule. An increase or a re-application starts the window again for the increase.
Always-excluded causes (Quick Life). The effects of alcohol or drugs (unless prescribed and taken as instructed by a registered New Zealand doctor), war, insurrection, terrorism, criminal activity, and dangerous jobs or pastimes listed in the wording.
The limit. If a person's total Momentum cover is over the cap, the benefit is reduced, starting with the most recent policy, and extra premiums are refunded.
Wrong information. If age or smoking status was misstated, the benefit is adjusted to what the premium would have bought; if the true age at the start was over 65, the Quick Life policy is void and premiums are refunded. Where disclosure is incorrect, incomplete or misleading, Momentum can decline a claim, reduce the benefit or cancel.
Unpaid premiums. The policy must be active and premiums up to date when the event happens.

On underwritten cover, the insurer is not bound by a clean application either. IFSO has published a case where 50% loadings were applied retrospectively and a stroke claim was paid at reduced terms, and a colon-cancer case settled at half the life benefit, $95,664 (IFSO, IFSO). For the reasons claims are declined, read insurance claim declined and life insurance exclusions.

Who is paid, and how fast

On Quick Life, the wording pays a deceased life insured's benefit to the nominated beneficiary if one is listed, otherwise to the policy owner or their estate. Momentum's FAQ describes payment going to the policy owner, then to the beneficiary or executor if the owner has died (Momentum Life: FAQs). Quick Life says payment is usually made within 48 hours of approval, and Momentum's FAQ says Funeral Insurance is usually sorted within 24 to 48 hours once it has the paperwork, but approval takes as long as the claim needs. From 15 November 2027 (not yet in force), the Contracts of Insurance Act 2024 sets interest on a death claim from the 31st day after notification (FMA). Probate, tax and beneficiary rules are in our pages on a $1 million payout, how to compare insurance quotes and probate in New Zealand. Inland Revenue treats insurance payouts as generally excluded income, which is not the same as tax-free in every case (IRD).

The plan pages are Quick Life and Funeral Cover. The buttons on this page open Momentum's own online application.

Who we are

General information, not advice. 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 and our disclosure. Momentum Life Limited's A.M. Best financial strength rating is B (Fair), affirmed 11 February 2026, and Momentum's own table puts B in its "Vulnerable" range (Momentum Life: Financial strength). A rating is an opinion, not a recommendation. Last reviewed 20 October 2026 against the sources below.

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