Funeral insurance ownership, beneficiaries and estates
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.
With Momentum Life's Funeral Insurance, a claim is paid to the Policy Owner. If the owner has died, it is paid to the beneficiaries the owner nominated, and if none were nominated, to the owner or the executor of the owner's estate. An adult child can be the owner of a policy on a parent. The wording does not describe an estate-first payout, and it does not replace a will.
Three roles: owner, life insured and beneficiary
Funeral insurance uses three roles, and one person can hold more than one.
- Policy Owner. The person named on the Policy Schedule who holds the contract, pays or arranges the premiums and makes decisions about the policy. Under Momentum's wording the owner must be a "natural person", not a business, corporation or similar organisation, and must be a New Zealander as the wording defines it.
- Life Insured. The person whose death triggers the benefit. A single policy covers "you or a Partner/Relative", and a family policy covers up to four people, each a Partner or Relative.
- Beneficiary. In the wording, "the person or people who will receive your insurance Benefit after you've passed away". It can be anyone you choose, provided they are a natural person: Momentum cannot pay a benefit directly to a company, charity or other organisation.
Sources for this page are the policy wording (Momentum Life: Funeral Insurance Policy Wording, 17 August 2023) and Momentum's FAQs.
Who is paid in each situation
| Situation | Who Momentum's wording pays |
|---|---|
| The owner is also the person insured and has named a beneficiary; the insured dies | The nominated beneficiary or beneficiaries |
| Same, but no beneficiary was named | The Policy Owner or the executor of the Policy Owner's estate |
| An adult child owns a policy on a parent; the parent dies | The Policy Owner, the child. The wording says all benefit payments are made to the owner, or on the owner's death to the nominated beneficiaries |
| A named beneficiary dies before the owner | Their nomination ends and their share is divided between the remaining beneficiaries, unless the owner updates the nomination |
| A family policy and one insured person dies | The benefit for that person is paid and a new Policy Schedule covers the remaining people |
Momentum's FAQ gives the order as the Policy Owner, then the nominated beneficiary, then the executor. Where the owner and the person insured are different people, check which role you are in before you assume you will be paid. The wording we read does not say what happens to the policy itself when an owner who is not the insured person dies first; ask Momentum.
Can an adult child own a policy on a parent?
Yes. The wording defines "Relative" to include the parent, grandparent, brother, sister, uncle, aunt, nephew, niece, or natural or legally adopted child of the Policy Owner or of the owner's Partner. A child can therefore own a policy that covers a parent, provided the parent is a New Zealander aged 40 to 75 at application. The wording does not set out a consent step for the insured person on Funeral Insurance (Momentum's Quick Life wording does, so do not assume the same). Talking to your parent first is simple and sensible, and the policy's early rules still apply: in the first 24 months only accidental death is paid. For the practical side see funeral insurance for parents.
Does the benefit go to the estate?
Only if the estate is the payee. Under the Momentum wording the estate comes in at the end of the order: if nobody is named, payment can go to the owner or to the executor of the owner's estate. Community Law explains that insurance proceeds are estate property only if they are payable to the estate, and otherwise who is paid depends on policy ownership and the insurer's terms (Community Law: Dealing with the deceased's property). Money that goes into the estate is shared out under the will, or under the intestacy rules in section 77 of the Administration Act 1969 if there is no will. That is a legal question, and this page is not legal advice: for anything contested or unusual, speak to a lawyer or a trustee company such as Public Trust.
Under section 65 of the Administration Act 1969 a life insurer may (but need not) pay a sum up to $40,000 to the administrator without a grant of probate or administration; the limit has been $40,000 since 24 September 2025 (Administration Act 1969; SL 2025/158). A Funeral Insurance benefit is $3,000 to $30,000, so most claims are under that line, although an accidental-death benefit can be up to $90,000. What each insurer does is the insurer's choice. See probate in New Zealand.
What if no beneficiary is named?
The benefit is paid to the owner or to the executor of the owner's estate, which can add steps if the owner has died. Naming a beneficiary removes that step. Name a natural person who is likely to be arranging the funeral, and consider a second name in case the first cannot act. A funeral director cannot be named: the wording says Momentum cannot pay a company directly. See does funeral insurance pay the funeral director.
How do I nominate or change a beneficiary?
The wording refers to the Policy Owner updating the beneficiary nomination but does not describe how. Call Momentum Life on 0800 108 108 and ask how to record a nomination and how to confirm it has been recorded. Keep the nomination current when circumstances change, since a beneficiary who dies before the owner drops out automatically but a person you would no longer choose does not. We say nothing about how a will interacts with a nomination beyond this: the policy pays under its own terms.
What are the tax implications of a funeral benefit?
Inland Revenue says that generally insurance payouts are excluded income, with exceptions such as income protection payouts (IRD: Insurance payouts). So a funeral benefit is generally not taxable income, but that is not a promise of "tax-free" in every case: ask Inland Revenue or an accountant about yours. New Zealand has had no inheritance tax since estate duty was abolished for deaths from 17 December 1992 (IRD: Inheriting property).
How a claim works
The owner, a nominated beneficiary or the executor contacts Momentum on 0800 108 108 or at [email protected] and completes a claim form. The claimant must give proof of the claim at their own expense, which includes a death certificate. Momentum's wording says valid claims are usually paid within 24 to 48 hours of approval; approval, not the death, starts that clock. The benefit amount can be less than the cost of the funeral, so the family may still need other money; see what a funeral costs.
Where to get advice
Momentum Life Limited is rated B (Fair) by A.M. Best, a rating Momentum's own table groups in its "Vulnerable" range; read its financial strength page. The first 24 months pay only for accidental death, and total premiums can exceed the benefit. The buttons on this page open Momentum Life's online application. 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. General information, not advice. Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). Back to the funeral insurance hub, or read how a policy works in how funeral insurance works and what happens if payments stop in funeral insurance lapse rules.
Adviser's view
A funeral insurance payout follows the policy's own rules, not the will. When the insured person dies, Momentum's wording pays the policy owner; a named beneficiary matters if the owner has died. Name a person, not a funeral director, keep the nomination current, and treat the will and the policy as two separate things.
Talk to a licensed adviser about funeral cover · free, no obligation.
Cite this page QuoteHub NZ (2026). Funeral Insurance Beneficiaries NZ: Who Gets Paid?. www.quotehub.co.nz/funeral-insurance/funeral-insurance-beneficiaries-nz. Updated 2026-10-20.
References
- Momentum Life: Funeral Insurance Policy Wording (PDF, issue date 17 August 2023)
- Momentum Life: FAQs
- Momentum Life: Claims
- Momentum Life: Financial Strength
- Community Law: Dealing with the deceased's property
- Administration Act 1969, section 65 and section 77
- Administration (Prescribed Amounts) Regulations: SL 2025/158
- Inland Revenue: Insurance payouts
- Inland Revenue: Inheriting property
Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, Free Will.