What is refunded if you die in the first 24 months of funeral insurance?

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.

If a person covered by Momentum Life's Funeral Insurance dies in the first 24 months from anything other than an accident, no benefit is paid and Momentum refunds all premiums paid for that person since the Cover Start Date. If the death is an accident within 90 days of it, the policy pays three times the benefit instead.

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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.

A premium refund, in this wording, is the return of the premiums you have paid for the person who died, and nothing else. The wording mentions no interest and no part of the benefit. Funeral Insurance is guaranteed acceptance, with no health questions for New Zealanders aged 40 to 75, and the price of that is the 24-month window. In that time only accidental death is paid. After 24 months, death from any cause is paid. The refund is what Momentum gives back when a death falls in the gap: an illness, a heart attack, a stroke, a death that is not an accident. For a family arranging a funeral it means money back, but far less than the benefit, and the funeral bill is unchanged. This page explains what the refund is, shows it with round example numbers, and sets it beside other insurers' terms.

What the wording says

Momentum's Funeral Insurance Policy Wording (issue date 17 August 2023, PDF page 6) says:

"In the first 24 months, we will only pay a Funeral Insurance Benefit if a Life Insured dies as a direct result of an Accident and the death occurs within 90 days of that Accident."
"After 24 months, we will pay a Funeral Insurance Benefit if a Life Insured dies from any cause."
A footnote: "If the Life Insured dies within the first 24 months from any cause other than Accidental Death, we will refund all premiums paid to us for that Life Insured since the Cover Start Date."

Three things follow. The refund is "for that Life Insured", so on a family policy of up to four people only that person's premiums are refunded. The wording says refunds "will be made to the account associated with the Policy" (page 8), so they go to the policy's account, not necessarily to the person who paid the funeral bill; ask Momentum how that works for your policy. And it does not explain why Momentum chose a refund, so we do not guess.

A worked example with round numbers

These numbers are illustrations, not a Momentum price. Momentum publishes no funeral premium. Suppose a $10,000 benefit with monthly premiums of $100.

What happens	What is paid
Death from illness in month 14	Premiums of about $1,400 refunded; no benefit
Death in month 14 from an accident, with death within 90 days of it	$30,000 (three times the benefit)
Death from illness in month 26	$10,000

The gap in the first row is the point. On this example the family receives about $1,400 where, twelve months later, it would have received $10,000. The difference, about $8,600, is the cost of guaranteed acceptance in that window. For a $30,000 benefit the accidental payout is $90,000, the maximum the wording allows.

What the refund is not

It is not the free look. Momentum gives 30 days from the Acceptance Date to cancel for a full refund if no claim has been made. That is a different right.
It is not the return of premiums on cancelling. If you cancel later, on 30 days' notice, you lose the premiums already paid.
It is not a share of the benefit. The wording has no reduced payout for a non-accident death in the window. See how funeral insurance works.
It is not available after 24 months. From then on the benefit is paid for any cause.

Increases and added people

An increase in the benefit, or an added person, is also "subject to the first 24-month Accidental Death only limitation" (wording, PDF page 7). So raising cover from $5,000 to $10,000 means a death from illness within the next 24 months pays nothing on the increase. The wording does not spell out how a refund would be split between the original cover and the increase, so ask Momentum before relying on it. See increasing funeral insurance cover.

What counts as an accident

The wording defines an Accident as bodily injury that occurs while the policy is in force, directly and solely caused by unintentional, violent, external and visible means with no other contributing causes, and not self-inflicted. Accidental death is death as a direct result of an Accident within 90 days of it. Illness is not an Accident. What counts as accidental death works through borderline cases, and the triple payout shows the 3 times calculation.

How other insurers treat a death in the early window

Details are from each insurer's own pages, read on 20 October 2026. Check current terms.

Provider	Early window	Death from another cause in the window
Momentum Life	24 months	All premiums refunded
NZ Seniors and OneChoice (Pinnacle Life)	12 months	OneChoice says you cannot get a refund of premiums after the cooling-off period
AA Life (Asteron Life)	24 months	All premiums refunded
Chubb Life	24 months	100% of premiums refunded
Greenwich Life	2 years	100% of premiums refunded
Unity	Applies; length not stated	Not stated

So "funeral policies refund premiums" is true of Momentum and some others, not all. A shorter window with no refund and a longer window with a refund are different trades, and neither is better for everyone. See waiting periods.

Is the refund a reason to buy?

It is a reason not to fear wasted premiums if illness takes a life early. It is no reason to expect the money. If you are already unwell and expect to need cover within two years, funeral insurance will not pay for illness in that time. Options include:

Savings or a prepaid funeral plan.
The Work and Income Funeral Grant, up to $2,697.43 (Work and Income); see the Funeral Grant guide.
Cover with health questions through a licensed adviser, where the insurer decides on terms; nobody can promise acceptance.
Momentum's Quick Life, for ages 18 to 65, which covers accidental death and new conditions from the start but excludes pre-existing conditions and suicide for the first 2 years. If death is from a pre-existing condition in the first 24 months and no claim is payable, premiums are refunded. See pre-existing conditions and funeral insurance.

Funeral policy premiums can add up to more than the benefit, and the benefit may not cover the whole funeral. FDANZ puts a full funeral with 50 guests at $11,700 for a cremation and $14,300 for a burial (FDANZ). Premiums are fixed each year to the 89th birthday, but can change for everyone on the plan on 30 days' notice; see whether funeral insurance premiums rise.

Where to get advice

The buttons on this page open Momentum Life's online application. Momentum Life Limited's A.M. Best rating is B (Fair), affirmed 11 February 2026, which Momentum's own table places in its "Vulnerable" range (Momentum: Financial strength). 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, a licensed Financial Advice Provider (FSP712931). If you disagree with a claim decision, complain to Momentum first, then go to the Insurance & Financial Services Ombudsman Scheme (IFSO), which is free. This is general information, not advice, and we review it quarterly. The hub is funeral insurance in New Zealand, and the plan page is Momentum Life Funeral Cover.