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

Should retirees keep or buy term life insurance?

Most New Zealand term life policies do not end when you retire. Fidelity Life, AIA and Chubb Life publish no expiry age on their main life cover, so the thing that changes is the price: stepped premiums rise every year. Keeping, reducing, replacing or cancelling depends on who still needs the money, and reducing the amount keeps some cover in place, which cancelling does not.

In short

A term life policy is life cover that pays a lump sum if you die (or are diagnosed as terminally ill) while the policy is in force, and pays nothing if you stop paying or the cover ends. The retirement question is rarely "will it stop?" It is "what does it now cost, and what is it for?" The need for cover is tested in our guide on whether you need life insurance when you retire: dependants, debts, cash for the funeral and the estate. This page starts after that, with a policy already in your name. It covers how the policy ends or does not end, how the premium behaves in your sixties, and what you can do about a premium that has become hard to justify. It is general information about insurers' published terms as at 20 October 2026. Your own policy schedule and wording decide what applies to you.

What does "term" mean on a New Zealand policy?

On most current New Zealand life policies, "term" does not mean a fixed number of years that ends at a set birthday. The published position at the insurers we read is below.

Product Published entry age Does cover expire? How the premium is set
Fidelity Life, life cover 16 to 75 "There is no expiry age" (Fidelity) Yearly Renewable Term rises each year; Level Term starts higher and "remains the same for the term of the policy"
AIA Living, Life Cover 10 to 70 "No Expiry" (AIA) Rate for Age (stepped), or level for 10 years, to 65 or to 80, after which it converts to Rate for Age
AIA Living, Accidental Death 16 to 60 Expires at 65 Different product: accident only
Chubb Life, Assurance Extra Life Cover 10 to 70 Never expires Premium review period of 1, 5 or 10 years, or to 65, 70, 80 or 100; recalculated at the end of each period
Momentum Life, Quick Life 18 to 65 Cover continues Stepped to 75, then fixed; not open to new applicants over 65

Sources: the insurers' own pages and wordings, read 17 to 20 October 2026 (see References). Chubb and AIA details come from AIA's Life Cover summary and umbrella wording, and Chubb's Assurance Extra brochure. Partners Life and Asteron Life publish no entry-age table we could read, so we state nothing for them.

The practical meaning: a "level to 65" or "level to 80" premium is a price promise for a stretch of years. When that stretch ends the premium does not disappear. AIA's wording says it converts to Rate for Age, and Chubb says the premium is recalculated on your age at the end of the review period. The Insurance & Financial Services Ombudsman (IFSO) published a case of a policy sold as "level to age 80" where the premium went from $49 to $190 a month when it converted, and the complaint was not upheld (IFSO: Increasing premiums). Check the schedule for the date your premium type changes.

How much does the premium climb in your sixties?

A stepped premium is re-priced every year for your new age, so the cost is lowest when you are young and highest when you are old. The Financial Markets Authority says cover that is cheaper at first can cost more over time, and that most premiums rise each year with age or inflation (FMA: Insurance).

Age Typical monthly cost, $500,000 stepped, non-smoking man Typical monthly cost, $500,000 stepped, non-smoking woman
50 $90 to $120 $80 to $100
60 $300 to $375 $225 to $275
65 $625 to $725 $400 to $475

Indicative monthly cost from insurers' published rate cards as at 8 September 2026: stepped, non-smoker, occupation class 1, standard rates with no loadings or exclusions, shown as the range across the insurers that priced each row. Your own premium depends on underwriting. Method and insurers: QuoteHub Premium Index. An insurer's own page, for example Fidelity Life, explains how its premiums are set.

Take the midpoints of the ranges as simple arithmetic. For a man, the monthly cost at 65 is about double the cost at 60. For a woman it is about 1.75 times. A man at the 65 range pays roughly $7,500 to $8,700 over a year, which is the figure to weigh against what the payout would actually do. The Index prices ages 25 to 65 only, so we do not publish a range for 70 or older, and no one should read the 60 to 65 jump as a forecast for later years.

Your options: keep, reduce, replace or cancel

Keep it. The case for keeping is a real, continuing need: a partner who depends on your income, a mortgage, a business obligation. Ask the insurer what the premium will be at each of the next five birthdays, and whether any level period is about to end.

Reduce the amount. AIA's wording says you may apply in writing to increase or reduce the amount of cover, that a reduction starts from the next premium due date, and that each year when a premium needs to rise you can either pay more or "reduce the benefits to the amount which your existing premium will cover" (AIA Living umbrella wording). Fidelity's life cover page does not say whether or how you can reduce, so ask. A reduction lowers the premium and, unlike cancelling, keeps some cover in place.

Replace it. A new policy means a fresh application. The FMA warns to keep the old policy running until the new one is in force, and to watch for new qualifying periods, pre-existing-condition exclusions and different premiums (FMA: Insurance). IFSO notes the new insurer sees your full history (IFSO: Life insurance). An illness since you first applied can change the price or the answer. Incomplete answers can also cost you a claim: IFSO case notes show insurers avoiding or reducing claims for non-disclosure (IFSO).

Cancel it. AIA's wording says you can cancel any time in writing, and there is no surrender value. Cancelling is hard to undo, because getting cover back means being assessed again at an older age.

Situation Option to look at first
The debt is paid and nobody relies on your income Cancel, or reduce to a small amount, after an adviser has looked at the policy
A partner still relies on your income Keep, or reduce to the amount that income replacement needs
The premium is stretching your budget but a need remains Reduce the amount, or ask about a different premium structure
You are in poor health Be cautious about replacing the policy; the old one may be cover you could not get again
Only the funeral and estate bills are left Compare funeral-only cover, a prepaid plan and saving (below)

Can funeral cover replace a large term policy?

Not like for like. Momentum Life's Funeral Insurance pays a fixed benefit of $3,000 to $30,000 (three times that for an accidental death within 90 days of the accident), with a $30,000 cap per life insured across Momentum's funeral policies. A $500,000 term policy and a $30,000 funeral benefit do different jobs: one replaces income or clears debt, the other puts a modest sum towards funeral costs. Momentum accepts New Zealanders aged 40 to 75 with no health questions, but in the first 24 months it pays only for accidental death; any other death in that window pays nothing and the premiums for that person are refunded. Premiums stop on the 89th birthday. Total premiums can end up larger than the benefit, and the benefit may not cover the whole funeral. It is not a savings plan. The full rules are on our Funeral Cover page.

If you look at Momentum as an insurer, its A.M. Best financial strength rating is B (Fair), affirmed on 11 February 2026, a grade Momentum's own table places in the "vulnerable" range; Momentum publishes the detail on its financial strength page. Quick Life, Momentum's guaranteed acceptance life cover, takes applicants only to 65, so it is not an option if you are past that age. If you are 65 or under, note that for its first 2 years Quick Life excludes pre-existing conditions and suicide, and a new application restarts that period. For a healthy person, fully underwritten cover arranged through an adviser can usually give more cover for less, if the insurer accepts them. Our guaranteed acceptance versus full medical guide sets out that trade-off.

Funeral cover is only one way to meet funeral costs. See funeral insurance cost for what drives the price, and funeral insurance versus a prepaid funeral. Over 75, Momentum has no product open to you; read life insurance over 75 for what other insurers publish.

Questions to ask before you change anything

  1. What is the premium now, and what will it be at each of my next five birthdays?
  2. Does any level or review period end soon, and what happens to the premium when it does?
  3. Can I reduce the sum insured, from what date, and what would the new premium be?
  4. Is there an expiry age, and is there a bereavement or funeral advance in the policy?
  5. If I replace it, what will the new insurer exclude, and when does it start paying?
  6. How will you be paid for advising on the change?

An adviser's answer to the last question matters. The FMA says most insurance advisers receive commission from the insurer, built into the premium (FMA: Insurance advice). The FMA's 2016 review found upfront commission can be as high as 200% of the annual premium, so if an adviser suggests replacing a policy, ask for the reason in writing.

Where QuoteHub fits

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. Smiths Insurance & KiwiSaver may receive a commission if you buy through our link; see our disclosure and how we are paid. Momentum's online quote is available through the buttons on this page, and the age limits above apply: Funeral Insurance 40 to 75, Quick Life 18 to 65. A licensed adviser is the right first call for an existing term policy, because the answer depends on its wording. Compare funeral options on our funeral insurance hub or the guaranteed acceptance hub. This page was drafted by the QuoteHub Editorial Team with AI assistance, from the sources listed below, and reviewed by the QuoteHub Adviser Team.

Frequently asked questions

Does term life insurance stop when I retire?

Not automatically. Fidelity Life states no expiry age on its life cover, AIA's Life Cover shows "No Expiry" and Chubb's Life Cover never expires, as long as premiums are paid. Check your own schedule, because some products, such as AIA's Accidental Death cover, expire at 65.

Why is my premium so high now?

If it is stepped, it is re-priced every year for your age. If it was level for a period, that period may have ended. The IFSO case above shows a conversion taking a premium from $49 to $190 a month.

Can I lower my life insurance premium without cancelling?

Possibly. AIA's wording lets you apply to reduce the sum insured, and lets you cut the benefit to what your existing premium covers. Ask your insurer whether your policy has the same option.

Is it worth buying new term life cover at 65 or over?

Only if there is a specific need, because the price is high and acceptance is the insurer's decision. Fidelity Life accepts applications up to 75, and AIA and Chubb Life to 70. Every term policy is assessed on your health. Acceptance cannot be promised.

References

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