What happens when funeral insurance premiums are missed?

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.

Missing a funeral insurance premium can end the policy, but not instantly. Under Momentum Life's Funeral Insurance wording, Momentum can cancel the policy if a premium is unpaid for more than one month, after notifying you in writing. It will not pay a claim unless all premiums due have been paid and the policy has not been cancelled when the event happens. A cancelled policy can be reinstated only by application, and "reinstatement is not guaranteed".

What "lapse" means, and what the wording says

"Lapse" is the everyday word for a policy that stops because premiums were not paid. Momentum's Funeral Insurance wording does not use it. It talks about the policy ending when "we cancel this Policy due to non-payment of premiums" (Momentum Life: Funeral Insurance Policy Wording, issue date 17 August 2023). This page uses lapse to mean that, and cancellation to mean you ending the policy yourself. They have different consequences.

The wording gives these rules, in this order:

You must pay premiums when due.
Momentum can cancel the policy if a premium is unpaid and "remains unpaid for more than one month". It will notify you in writing, at the last address it holds, of its intention to cancel. "Address" in the wording includes an email address.
Momentum will not pay a claim unless you have paid all premiums due and the policy has not been cancelled at the time the claim event occurs.
If Momentum cancels for non-payment, you can apply to reinstate. Outstanding premiums must be paid, other eligibility criteria apply, and reinstatement is not guaranteed.

Is there a grace period?

The wording does not use the term. The nearest thing is the one-month point after which Momentum "can" cancel. That is a permission for Momentum, not a promise to you that cover continues for a month. Point 3 matters more: the wording says a claim is not paid unless all premiums due have been paid at the time of the claim event. So a premium that is overdue, even before any cancellation, is a risk to a claim. We found no published grace period in the wording; ask Momentum if you need to know how it applies to your own situation.

A timeline of a missed payment

Stage	What the wording says
Premium due date passes	The premium is due. Claims are not paid unless premiums due are paid
Unpaid for more than one month	Momentum can cancel, after notifying you in writing
Momentum cancels	The policy ends. No claim can be made for an event after that date
After cancellation	You can apply to reinstate. Outstanding premiums must be paid. Not guaranteed
No reinstatement	You would need to apply for new cover. A new policy starts its own 24-month window, and the entry age limit of 75 applies

Lapse versus cancelling yourself

	Momentum cancels for non-payment	You cancel
How it starts	Premium unpaid for more than one month, then written notice	You call, or send a signed letter by post or email, giving 30 days' notice
Route back	Apply to reinstate	Reapply for new cover
Premiums paid so far	The wording does not say they are returned	Lost, unless you cancel within the 30-day free look with no claim made
24-month window	The wording does not say whether reinstatement restarts it	A new policy has its own window

The free look is 30 days from the Acceptance Date. Outside it, the wording says there is "no refund of premiums" if you cancel. The wording is silent on refunds when Momentum cancels for non-payment, so do not assume one. The one refund in the wording is for a death from a cause other than an accident in the first 24 months, when all premiums for that person are returned.

A reinstatement checklist

The wording does not set out the steps, so this is a practical list, not a Momentum process.

Act at once. Customer care is on 0800 108 108 and [email protected].
Pay what is overdue. The wording requires outstanding premiums to be paid before reinstatement.
Ask what criteria apply. The wording says reinstatement is "subject to eligibility criteria" and Momentum's terms without listing them.
Ask whether the 24 months restart. The wording does not say. If cover restarts as accident-only for 24 months, a death from illness in that time pays no benefit.
Ask whether your rate changes. The wording prices increases and added people at current rates but says nothing about the rate on reinstatement.
Get the answer in writing and wait for Momentum's confirmation before you treat the policy as in force.

How to avoid an accidental lapse

Pick a payment rhythm that fits your pay. The owner can apply at any time to change the method and frequency: fortnightly, monthly or annually. Card payments carry an additional processing fee.
Keep your contact details current. The cancellation notice goes to the last address Momentum holds.
Know the premium. It is fixed each year until the insured person's 89th birthday, when payments end and cover continues for life. It can change for everyone on the same offer for a change in tax or other law, or claims experience significantly different from expected, on at least 30 days' written notice, taking effect from the next policy anniversary.
Ring before you miss. If money is tight, ask about changing the payment method or frequency before the due date passes. Cancelling should be the last resort, since you lose the premiums paid.
Tell the person who would claim. The beneficiary or executor should know the policy exists and how to reach Momentum: claims are on 0800 108 108 or [email protected].

If your policy is Quick Life

Momentum's Quick Life wording is similar but not the same. Momentum can cancel if premiums stay unpaid for over a month. Paying after cancellation "does not automatically reinstate" the policy, and reinstatement is available only if the cancellation was due to missed payments. A reinstated Quick Life policy has its own 2-year period in which pre-existing conditions and suicide are excluded (Momentum Life: Quick Life Insurance Policy Wording, November 2025). See the Quick Life plan page.

If you disagree with a decision

Complaints go first to Momentum on 0800 108 108 or [email protected]. If unresolved, you can take them to the Insurance & Financial Services Ombudsman Scheme (IFSO), a free service on 0800 888 202, whose assessment is binding on Momentum. See funeral insurance disputes.

What this does to the value of the policy

A missed premium is a reminder of the trade-off. Funeral Insurance is not a savings plan. Total premiums over many years can add up to more than the benefit, and the benefit may not cover the whole funeral: FDANZ's 2026 report gives averages of $4,700 for an unattended cremation and $11,700 for a full cremation funeral with 50 attendees (FDANZ, 2026 New Zealand Funeral Industry Trends Report). If you are not sure you can keep paying, say so to an adviser before the first payment, not after. Other insurers set different terms for missed payments, so check each wording; the how funeral insurance works page explains the moving parts.

Where to get help

The buttons on this page open Momentum Life's online application. Momentum Life holds an A.M. Best rating of B (Fair), in the range Momentum calls "Vulnerable"; see its financial strength page. 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). Back to the funeral insurance hub, or read about cancelling funeral insurance.

If you are planning ahead for your own funeral costs

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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.

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.

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.

Adviser's view

The wording gives you no formal grace period you can lean on. Momentum can cancel after a premium has been unpaid for more than a month, and it will not pay a claim unless the premiums due have been paid. Reinstatement is possible by application but is not guaranteed. If you miss a payment, pay it and tell Momentum straight away, and do not assume you are covered until it confirms.

Henry Smith, Financial Adviser (FSP1010699). General information, not personalised financial advice.

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Cite this page QuoteHub NZ (2026). Funeral Insurance Lapse NZ: Missed Premium Rules. www.quotehub.co.nz/funeral-insurance/funeral-insurance-lapse-rules-nz. Updated 2026-10-20.