Funeral insurance cash value and expiry rules

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.

Funeral insurance in New Zealand does not build cash value. It is a pure risk product: you pay premiums for a death benefit, and if you cancel after the 30-day free look you get nothing back. Momentum Life's Funeral Insurance does not expire at a set age. Premiums are level until the insured person's 89th birthday, then stop, and cover continues for life.

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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

Already have cover? Keep it. New cover won't pay for a condition you already have in its first 2 years.

Opens Momentum Life's online application; its guidance only covers eligibility. QuoteHub is a Momentum Life partner. Smiths Insurance & KiwiSaver may receive a commission if you buy. General information, not advice.

Funeral insurance is not a savings plan

Cash value is a balance that builds inside a policy and that you can withdraw or borrow against, and surrender value is the amount paid if you cancel. Momentum Life's Funeral Insurance wording describes neither. Its opening pages say the policy "is not a savings or investment plan and depending on how long you keep your cover, the total premiums you pay to us could exceed the Benefit we pay to you", and that the benefit "may not cover the cost of a Life Insured's funeral" (Momentum Life: Funeral Insurance Policy Wording, 17 August 2023). Momentum's Quick Life says it directly: "Your policy is a protection policy only. It does not build up any cash or surrender value" (Momentum Life: Quick Life Insurance Policy Wording, November 2025). In New Zealand the product is called funeral insurance or funeral cover; "burial insurance" and "final expense insurance" describe the same idea under other names (see burial insurance in NZ).

When any money comes back

There are only a few situations, all of them in the Momentum wording:

Situation	What is returned
You cancel within 30 days of the Acceptance Date and no claim has been made	Full refund of premiums paid
The insured dies of anything other than an accident in the first 24 months	No benefit; all premiums paid for that person are refunded
You cancel after the 30 days	Nothing: the wording says there will be no refund of premiums, and you lose the benefit of premiums already paid
A claim is paid	The benefit, to the owner or beneficiary; no refund of premiums
Premiums stop at 89	Nothing is paid; cover simply continues

A free look and a refund after an early non-accident death are protections, not savings. Our cancellation guide explains the steps.

Does funeral insurance expire?

Not by age. The Momentum wording lists the benefit expiry as "cover for life – no premiums from age 89". The policy ends on the earliest of three events: you cancel it, Momentum cancels it for non-payment of premiums, or the last benefit is paid for the last person insured. Cover for an individual ends when you remove them or the benefit is paid. Momentum can cancel if a premium stays unpaid for more than one month, after writing to you; reinstatement is by application and is not guaranteed. So the risk is lapse, not expiry; see funeral insurance lapse rules.

What happens to premiums at 89 with Momentum Life?

Premiums stop on the insured person's 89th birthday and cover continues. Until then the rate stays the same each year. The wording lets Momentum change it only across the whole offer, for a tax or other law change or claims experience far from expectations, with 30 days' written notice. Premiums are paid fortnightly, monthly or annually, and card payments carry a processing fee. For when premiums stop on other products see when funeral insurance premiums stop.

A worked example

The numbers below are round, hypothetical and chosen for arithmetic. They are not Momentum prices, which Momentum does not publish in its wording, and we do not publish them either. Imagine someone who takes out a $10,000 benefit at 70 and pays a monthly premium that stays the same until 89, 19 years.

Hypothetical monthly premium	Total paid by 89 (19 years)	Compared with a $10,000 benefit
$20	$4,560	About 46% of the benefit
$40	$9,120	About 91% of the benefit
$60	$13,680	137% of the benefit

The method is monthly premium × 12 × years. Run it with your own quote and your own age. Then follow the timeline:

Months 0 to 24. Only accidental death pays (death within 90 days of an accident), at three times the benefit. For another death, nothing is paid and all premiums are refunded.
Month 25 onwards. Death from any cause pays the $10,000.
At 89. Premiums stop. The $10,000 remains payable. No cash value has accumulated at any point.
If the person cancels at 80. The benefit ends, and nothing is returned.

If death comes early in the payment period the benefit is far larger than what was paid, and if it comes late the total paid can exceed the benefit. That is how insurance works, and it is not a return on savings. A person who wants a sum they can access while alive should look at savings or a prepaid plan; see funeral insurance versus a prepaid funeral.

Exceptions at other insurers

Other products differ. NZ Seniors' policy document (issue date 23 May 2021) describes an Early Cash Out Option after the 85th birthday that ends the cover and pays 75% of the benefit amount in force immediately before 85; if you do not elect it, the full benefit plus 25% Bonus Cover is payable on death (NZ Seniors: Funeral insurance policy document). That is a payment of part of the benefit in exchange for giving up the cover, not a surrender value built up from premiums. Greenwich Life's Funeral Plan stops premiums once the total paid equals the benefit (Greenwich Life: The Funeral Plan). Momentum's marketing has mentioned a premium cashback, but it is not in the wording and we have not verified it, so we do not rely on it; see cash back funeral insurance.

What the benefit can be used for

The wording we read places no condition on how the money is spent. It is paid to the owner or beneficiary, who can use it for the funeral, for debts or for anything else, which is why the amount you choose matters more than the label. Costs vary widely. FDANZ's 2026 survey found an average of $11,700 for a 50-guest cremation funeral and $14,300 for a burial (FDANZ, 2026 New Zealand Funeral Industry Trends Report), so a benefit at the lower end of Momentum's $3,000 to $30,000 range would cover only part of it.

How this differs from other cover

Quick Life is also cover for life with no cash value, but it is a larger lump sum ($50,000 to $300,000) with stepped premiums to 75 and a two-year exclusion for pre-existing conditions and suicide. Fully underwritten life cover through a licensed adviser varies by product; ask for the surrender terms in writing before you assume any exist. See the Momentum Life Funeral Cover page and the cost guide.

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 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 funeral insurance works.