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

What happens if you miss a life insurance premium?

Missing one life insurance payment in New Zealand does not usually end your cover on the day, but the grace period depends on your policy. AIA's Living wording gives 30 days' grace and lets AIA cancel if a premium is unpaid 31 days after its due date. Momentum can cancel a Quick Life or Funeral Insurance policy if premiums stay unpaid for over a month. Once cancelled, reinstatement is by application and is not guaranteed.

In short

What the wordings say

Insurer and product Grace or cancellation rule Reinstatement
AIA, Living range (wording v8) "30 days' grace" on any premium due; AIA can cancel if a premium is not paid within 31 days of the due date At AIA's discretion, on any conditions it considers appropriate; you write to request it
Momentum, Quick Life May cancel if premiums stay unpaid for over a month, after written notice to the last contact details it holds Apply; subject to approval and conditions; paying after cancellation does not reinstate automatically; the 2-year rule applies again
Momentum, Funeral Insurance May cancel if a premium is unpaid for more than one month, after written notice Apply; subject to eligibility and terms; outstanding premiums must be paid; not guaranteed
Fidelity Life Sends a letter if you miss a premium and asks you to contact it; the public FAQ gives no grace period Contact your adviser or Fidelity; requirements depend on the policy and how long since it lapsed
Chubb Life, Asteron Life, Partners Life Not found in the public documents we could read Not found; check your policy documents

Sources: AIA Living umbrella policy wording, version 8, Momentum Life: Quick Life wording (November 2025), Momentum Life: Funeral wording (17 August 2023), Fidelity Life: FAQs.

AIA's wording also says that if a non-health claim is paid while a premium is overdue, the overdue amount may be deducted, and that for health benefits the overdue premium must be paid first.

A timeline for a missed payment

  1. Due date. The payment fails or is not made. Some insurers write to you.
  2. Grace period. On AIA's Living range, cover continues for 30 days. Check what yours says.
  3. After about a month. AIA and Momentum can cancel. Momentum says it will send written notice first, to the last contact details it holds, so keep them current.
  4. After cancellation. Cover has ended. Paying the arrears does not by itself restore it.
  5. Reinstatement request. The insurer decides, and may attach conditions or ask for evidence. AIA's wording does not say what evidence.

Reinstating can restart the clock

This is the risk of letting a policy lapse and coming back. Momentum's Quick Life wording says the 2-year rule, which excludes pre-existing conditions and suicide, applies again if your policy is reinstated after being cancelled. It also says that if you cancel yourself and later rejoin, your two year standdown period will recommence and premiums paid are not refunded. Fidelity's wording excludes death by suicide within 13 months of the start date, the date of reinstatement or an increase in the sum insured (Fidelity Life: LifeProtect Life Cover wording).

Momentum's Funeral Insurance wording says reinstatement is subject to eligibility and not guaranteed; it does not say whether the 24-month window starts again, so ask Momentum. If you are thinking of stopping payments on purpose, do not: the cover you give up may be hard to replace, and a new application can bring new waiting periods, exclusions and health questions. The Financial Markets Authority says to keep the old policy running until the new one is in force and to watch for new qualifying periods and pre-existing exclusions (FMA: Insurance).

Options when payments get hard

Pause. Fidelity offers a premium holiday on selected life, survivor's income and total and permanent disability covers: cover and premium can be paused for up to 12 months if you become bankrupt, are made redundant, start tertiary study or travel overseas. You call to reinstate, and Fidelity says no further health questions will be required. Its income protection and mortgage repayment covers use leave without pay instead, and nothing is covered during the break. Fidelity also lists premium deferral, with cover staying in place while payments are delayed for a set period (Fidelity Life: Struggling with your premium). AIA's wording does not mention a premium holiday.

Reduce. AIA's wording lets you apply in writing to reduce the amount of cover, effective from the next premium due date, and says if a premium increase is needed you can reduce benefits to the level your existing premium covers. Momentum accepts a written request to decrease the Quick Life benefit. Fidelity lists a lower sum insured as one way to cut the cost.

Change structure. Stepped premiums rise each year with age; level premiums start higher. See stepped versus level premiums, and ask an adviser before you switch, because replacing a policy can reset terms.

Guaranteed acceptance versus underwritten cover

Underwritten policies can need fresh health information to reinstate, depending on the insurer. Guaranteed-acceptance products ask no health questions, but they have early windows: Quick Life's 2 years, and Funeral Insurance's 24 months of accidental-death-only cover. If Quick Life is cancelled and you return, the 2 years apply again; for Funeral Insurance, ask Momentum whether the 24 months restart. See funeral insurance lapse rules and guaranteed acceptance.

What to do now

  1. Find the grace period and cancellation terms in your wording. If you cannot find them, ask in writing.
  2. Contact the insurer or adviser before the due date if you cannot pay. Ask about a pause, a smaller sum insured or a different premium type.
  3. If a payment already failed, pay immediately and ask for written confirmation that cover continues.
  4. Update your address, phone and email so notices reach you.
  5. If a decision seems wrong, complain to the insurer first. For Momentum, the next step is IFSO. Other insurers name their scheme in their documents.
  6. Read questions to ask about life insurance, cancel or change life insurance and premium drivers.

Where Momentum fits

Momentum Life Limited has an A.M. Best financial strength rating of B (Fair), in A.M. Best's "Vulnerable" range on Momentum's own scale; see its financial strength page. Quick Life accepts ages 18 to 65, with a 30-day free look from the policy start and a first 2 years that exclude pre-existing conditions and suicide. Funeral Insurance accepts ages 40 to 75 and pays only for accidental death in its first 24 months, refunding premiums for other deaths. A healthy person can usually get more cover for less with fully underwritten cover through a licensed adviser. The buttons on this page open Momentum's own application.

Financial 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 advice. QuoteHub is a Momentum Life partner, and Smiths Insurance & KiwiSaver may receive a commission if you buy through our link; see our disclosure and how we are paid. Written by the QuoteHub Editorial Team from the sources below; last reviewed 20 October 2026.

Frequently asked questions

How long is the grace period on life insurance in NZ?

It depends on the policy. AIA's Living wording gives 30 days, with cancellation possible 31 days after the due date. Momentum can cancel after a month of non-payment. Check your own wording.

Can I reinstate a cancelled policy?

You can ask. AIA and Momentum both decide, on conditions, and neither guarantees it. Reinstatement can restart exclusion periods.

Does a missed payment cancel guaranteed-acceptance cover?

It can. Momentum may cancel Quick Life or Funeral Insurance after over a month unpaid.

References

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