AIA funeral cover: a standalone policy or a life-cover benefit?

Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931) · Updated 2026-10-20 · Reviewed quarterly, when the underlying data is restated.

Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name.

AIA New Zealand does not sell a standalone funeral insurance policy that we could find. Its funeral money is the Bereavement Support Benefit inside AIA Living Life Cover. On written notice of death, AIA pays the lower of the life cover, $15,000 (sole policy owner) or $25,000 (surviving policy owner), and the life cover is reduced by that amount. This reflects AIA's policy wording and website as at 20 October 2026.

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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.

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.

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

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A funeral benefit and a funeral policy are different things. A funeral policy is a separate contract that exists to pay a modest fixed sum when someone dies. A funeral benefit is a clause inside a larger life policy that releases part of the death benefit early, so the family has money before the full claim is settled. AIA's clause is the second kind. It is only there if the person already holds AIA life cover, which AIA underwrites on health, and the early payment is deducted from what the policy would pay in total. Nothing is added on top.

What AIA sells, and what we did not find

AIA New Zealand's current range is called AIA Living. Its life cover takes applicants aged 10 to 70 (AIA: Life insurance). It is assessed on health and lifestyle, unlike guaranteed-acceptance funeral policies, which ask no health questions. AIA's life cover page mentions early funeral money of up to $25,000. We found no retail funeral insurance product on AIA's site, so a search for "AIA funeral insurance" most often lands on the life cover page.

One AIA funeral plan does exist outside the retail market. A September 2019 AIA leaflet describes a plan for members of the New Zealand Defence Force, sold through Aon, for ages 50 to 80 and $7,500 to $15,000 (AIA: NZDF funeral plan leaflet). It is a group arrangement, the leaflet is dated September 2019, and we could not confirm that anyone outside the group can buy it, so we do not treat it as an AIA retail product.

How the Bereavement Support Benefit works

The clause in AIA Living's Life personal cover policy wording (effective 10 October 2023, Section 4) reads, in part: "Upon receiving written notification that the life assured has died, AIA will pay the lower of" the Life Cover Benefit, $15,000 "if the life assured is the sole policy owner", or $25,000 "if there is a surviving policy owner" (AIA: Living Life personal cover policy wording). The same clause says four more things that matter.

It "will be treated as an early payment of the Life Cover Benefit".
The Life Cover Benefit "will then be reduced by the amount paid".
Only one Bereavement Support Benefit payment is made per life assured.
The trigger is written notification of death. The clause as we read it sets no waiting period of its own.

The words "surviving policy owner" matter. If a person owns their own policy alone, the cap is $15,000. If the policy has another owner who is still alive, such as a partner on a jointly owned policy, the cap is $25,000. Which one applies depends on how your policy is owned, which is on the schedule.

A worked example

These figures are round and invented to show the mechanics. They are not a quote and not a real policy.

	Sole owner	Surviving owner
Life cover	$200,000	$200,000
Early payment on notice of death	$15,000	$25,000
Life cover left to claim	$185,000	$175,000
Total AIA pays	$200,000	$200,000

If the life cover were only $10,000, the early payment would be $10,000, the lower figure, and nothing would be left. The benefit is useful for liquidity: it puts money in the estate's or the owner's hands quickly. It does not raise the total.

An early life-cover payment compared with standalone funeral cover

	AIA Bereavement Support Benefit	Momentum Life Funeral Insurance
What it is	A clause in underwritten life cover	A separate funeral policy
Health questions	Yes, for the life cover it sits in	None
Entry age	Life cover 10 to 70	40 to 75
Amount	Lower of cover, $15,000 or $25,000	$3,000 to $30,000 you choose
Adds to the total paid	No, it is an advance	Yes, it is the whole benefit
Payment trigger	Written notice of death	An approved claim
Early-death window	Not in the clause as we read it	24 months

Neither is better for everyone. An AIA policyholder who already has the cover does not need a second product for the first few thousand dollars. Someone without any life cover, or who has been declined, has no benefit to draw on.

What to check in your own AIA documents

Who owns the policy. The owner structure decides whether $15,000 or $25,000 is the cap.
Which wording you hold. The wording above took effect on 10 October 2023. Older AIA, Sovereign or AIA Living documents can differ. If your policy has older terms, read those.
Whether the policy is still in force. Cover that has lapsed or been cancelled pays nothing.
Who gets the money. Who receives the money is set by the policy and any nomination, so check both are up to date. Our life insurance beneficiaries guide explains why.
How much the funeral may cost. FDANZ's 2026 report puts a full funeral with 50 guests at $11,700 for a cremation and $14,300 for a burial (FDANZ, 2026 New Zealand Funeral Industry Trends Report). An advance of $15,000 or $25,000 is above either average, but a lower life cover would cap the advance lower.

AIA's rating, as AIA prints it, is Fitch AA (Very Strong); the page shows no date and we retrieved it on 17 October 2026. A Fitch grade is an opinion on financial strength, not a recommendation, and it cannot be compared letter for letter with A.M. Best's grades. ASB sells life cover that AIA underwrites, which is covered on our ASB funeral insurance page. If you hold an old Sovereign policy, AIA's life insurer page sets out what AIA now services.

Where Momentum Life's funeral insurance fits

Momentum Life's Funeral Insurance, issued by Momentum Life Limited (FSP472286), is the standalone alternative in the table above. It is open to New Zealanders aged 40 to 75, and applying involves no health questions. You choose a benefit between $3,000 and $30,000, and unlike AIA's advance that amount is the whole benefit. The trade-off is timing. For the first 24 months it pays only if death results from an accident and happens within 90 days of it (three times the benefit); for any other death in that window nothing is paid and all premiums for that person are refunded. From month 25 it pays for death from any cause. Premiums are level until the 89th birthday, can change for everyone on the plan with 30 days' notice, and there is no terminal illness benefit. Total premiums can end up more than the benefit, and the benefit may not cover the whole funeral. Anyone over 75 cannot apply.

Momentum Life's A.M. Best rating is B (Fair), which Momentum's own table places in its "Vulnerable" range; the detail is on its financial strength page. Read the Momentum Life Funeral Cover page for the full terms, and the funeral insurance hub for other options.

Where to get advice

The buttons on this page open Momentum Life's online application, one option among several. If you want to know whether your AIA cover already does the job, or how it compares with other covers on your details, a licensed adviser can read your schedule with you. QuoteHub is a Momentum Life partner and Smiths Insurance & KiwiSaver may receive a commission if you buy a Momentum policy; see how we are paid. Advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931).