Mortgage life insurance with pre-existing medical conditions
Whether you can get life cover to clear a mortgage with a pre-existing condition depends on the condition and the route. Fully underwritten cover assesses you individually and may add a loading, an exclusion or a decline. Momentum's Quick Life accepts people aged 18 to 65 without health questions, but for the first 2 years it does not pay for death from a pre-existing condition, and it covers $50,000 to $300,000 at the start. Neither route is a promise to clear a debt.
In short
- Quick Life has no health questions, but death from a pre-existing condition in the first 2 years is excluded, and premiums are refunded when no claim is payable. The window is 24 months, not one year.
- Its starting maximum is $300,000, rising by 3% each anniversary to a cap of $500,000 per person. Many mortgages are larger.
- Underwritten cover may carry a loading, an exclusion or a decline instead. Asteron says it can usually still offer cover with an existing condition by adding a stand-down, raising the premium, or excluding the condition (Asteron).
- A guaranteed acceptance policy pays its owner or beneficiary, not the lender. The family still has to repay the loan.
What counts as pre-existing
Quick Life's wording defines a pre-existing condition as an illness, condition or symptoms in the 2 years before cover starts, including treatment or advice, symptoms "even if undiagnosed", or what the person "would reasonably have been aware of". It adds "very high blood pressure, cholesterol over 7.0, a BMI over 40, or complications related to diabetes" (Momentum Life: Quick Life Insurance Policy Wording, November 2025).
That reaches further than a diagnosis you know about. Someone who had chest pain they never reported, or a cholesterol reading over 7.0, may find a sudden death in the first 2 years falls inside the exclusion. This answers the question many people ask: if I die suddenly, could pre-existing conditions leave gaps? A sudden accidental death is covered from day one. A sudden death from a condition with earlier symptoms or treatment may not be, in the first 2 years.
Underwritten and guaranteed acceptance, side by side
| Fully underwritten | Quick Life | |
|---|---|---|
| Health questions | Yes | None |
| An existing condition | May add a loading, exclusion, stand-down or decline | No effect on acceptance or price |
| Cover amount | Varies by insurer | $50,000 to $300,000, plus 3% a year to $500,000 per person |
| First 2 years | As offered | Pre-existing conditions and suicide excluded; accident and new conditions covered |
| Premiums if death is excluded in that window | As offered | Refunded for a pre-existing condition death when no claim is payable |
| After 2 years | As offered | Pre-existing conditions covered, except a few that can be permanently excluded in the policy schedule |
| Premium shape | Stepped or level, by insurer | Stepped to 75, then fixed |
A worked mortgage example
The figures are invented and round. They are not a quote and not a prediction. A borrower has a $400,000 mortgage balance, a partner and a condition that Quick Life treats as pre-existing, such as a BMI over 40.
| Route and event | What is paid | Mortgage gap |
|---|---|---|
| Underwritten cover for $400,000 with a 50% loading, death from the condition in year 1 | $400,000, assuming the insurer covers the condition at a higher price | None |
| Same policy, but the insurer excluded the condition, same death | Nothing for that cause | $400,000 |
| Quick Life $300,000, death from the condition in month 14 | No benefit; premiums refunded | $400,000 |
| Quick Life $300,000, same death in month 30 | $300,000 plus any increases, as a pre-existing condition is now covered unless permanently excluded | A gap of about $100,000, less any increases |
| Quick Life $300,000, accidental death in month 14 | $300,000 plus any increase | A gap of about $100,000, less any increase |
The first two lines assume the underwritten insurer's decision. The loading is hypothetical; Chubb Life, the only insurer whose diabetes loadings we found published, puts them at 50 to 75% for a well-controlled later diagnosis and at least 100% for Type 1. The point of the table is the timing. Under Quick Life the first 2 years carry the risk. Under an underwritten policy the risk is in the terms offered, which you see before you buy.
What this means for a mortgage
Guaranteed acceptance leaves a window. For 24 months after the start, a death from a pre-existing condition does not pay. That is a gap against a mortgage, because the loan is still due. Do not describe it as year one: the wording says premiums are refunded if the person dies of a pre-existing condition "within the first 24 months".
The cap may be too low. Quick Life starts at up to $300,000, rising by 3% each anniversary to $500,000, and you can opt out of increases. The wording also applies a combined limit across all of a person's Momentum policies. A larger loan needs more cover from somewhere else.
An underwritten loading is a price, not a refusal. If the condition is covered but costs more, you can see the cost. If the condition is excluded, the exclusion is stated in the offer. Neither route removes the need to answer every question: IFSO case notes show insurers reducing or avoiding claims for non-disclosure (IFSO).
Replacing cover resets things. The Financial Markets Authority says to keep your old policy running until the new one is in force, and to watch for new qualifying periods, pre-existing exclusions and different premiums (FMA). With Quick Life, a new policy has its own 2-year window, so do not cancel existing cover until the new one is in force and its window has passed.
What happens to debts and funeral costs
Debts in your name alone are paid from your estate (Administration Act 1969, s 26; legislation.govt.nz). A joint bank account passes to the other owner and is not part of the estate (Community Law). A mortgage held jointly is a different case; ask your lender what happens to the survivor's obligations. A bank can also release money from the deceased's account to pay for the funeral without waiting for probate (govt.nz). Insurance pays the nominated beneficiary or owner, or the estate, so it does not clear the mortgage unless the proceeds are used for that. For the structures, see mortgage protection versus standard life cover.
Who each route suits
Quick Life suits someone with a condition who wants cover in place without a medical, accepts the 2-year limit, and needs less than $300,000. It is a poor fit if a serious condition is already known and the cover is needed within 2 years. Underwritten cover suits someone whose mortgage is larger, or who wants to see the terms before buying. A healthy person can usually get more cover for less with fully underwritten cover through an adviser. Whether you can be accepted is the insurer's decision, never ours.
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. Momentum Life Limited has an A.M. Best rating of B (Fair), affirmed 11 February 2026; see its financial strength page. This page has no form and collects nothing. It is general information, not advice. Written by the QuoteHub Editorial Team and reviewed by the QuoteHub Adviser Team, 20 October 2026.
To size the cover, read how much life insurance costs and how much you need. For product rules, see what guaranteed acceptance is, life insurance after a decline and the Quick Life page. Test your age against the eligibility checker.
Frequently asked questions
Will insurance cover my funeral and clear my debt if I die suddenly?
An accidental death is covered by Quick Life from the start. A sudden death from a condition with earlier symptoms or treatment may fall inside the 2-year pre-existing exclusion. Debt in your name alone is paid from the estate, whatever the insurer does.
Does Quick Life pay my lender?
It pays the owner or nominated beneficiary, or the estate. Using it for the mortgage is a choice made after payment.
Can a loading replace an exclusion?
Asteron says an insurer can respond to an existing condition by raising the premium or excluding the condition. Which one you get is decided at underwriting.
References
- Momentum Life: Quick Life Insurance Policy Wording (November 2025), retrieved 17 October 2026
- Momentum Life: Financial strength, retrieved 20 October 2026
- Asteron Life: Insurance options for pre-existing conditions, retrieved 20 October 2026
- IFSO: Non-disclosure case, retrieved 20 October 2026
- Financial Markets Authority: Insurance, retrieved 20 October 2026
- Chubb Life: Diving into diabetes, retrieved 20 October 2026
- Administration Act 1969, retrieved 20 October 2026
- Community Law: Dealing with the deceased's property, retrieved 20 October 2026
- govt.nz: What to do when someone dies, retrieved 20 October 2026
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